Shareholder rebellions surge as FTSE 100 pay disputes double

Shareholder rebellions jumped by a quarter at 2018 annual general meetings as protests about pay at FTSE 100 companies doubled.

The Investment Association, which compiled the figures, said it added 120 FTSE All-Share companies to its register of companies that had at least 20% dissent for AGM resolutions.

The total number of contentious resolutions recorded by the end of July was 237 – up 25% from a year earlier. The total included 29 "repeat offenders" that suffered protests over the same resolution that caused unrest a year earlier.

Executive pay declined as an issue overall but the number of FTSE 100 pay resolutions attracting protests doubled to 18. Persimmon and Melrose were two of the FTSE 100 companies that suffered rebellions over pay in 2018.

Almost half of votes cast at Persimmon’s AGM opposed chief executive Jeff Fairburn’s £47m payday and a quarter of votes failed to back Simon Peckham’s £43m package at Melrose. Their pay deals sent average FTSE 100 pay up 23% to £5.7m, figures from the High Pay Centre showed earlier in August.

The Investment Association, which represents the UK’s big fund managers, said its research showed shareholders targeting individual directors, especially chairmen, at offending companies. The number of rebellions over directors’ reappointments more than doubled to 80, including 37 in the FTSE 250, from a total of 38 a year earlier.

Chris Cummings, the Investment Association’s CEO, said: “There was a deeply disappointing jump in the number of FTSE 100 companies that saw pay rebellions in 2018. Shareholders clearly remain unimpressed with the approach to pay last year.

“Shareholders are using their votes to hold individual directors to account for decisions they made on issues such as executive pay and board diversity, as well as concerns that individual directors do not have the bandwidth to fulfil their roles as they spread themselves too thinly on too many boards.”