Shareholders revolt over executive pay: Sports Direct, Sky and Morrisons named in public register

  • A register of companies where more than 20% of shareholders rebelled against resolutions was published on Tuesday.
  • Most common concerns relate to executive pay, and some of the UK’s best known firms feature.
  • The new public register was ordered by Prime Minister Theresa May as part of a crackdown on executive salaries and bonuses.

LONDON – Sports Direct, Sky and Morrisons are just some of the well known British companies named on a list of firms that have witnessed shareholder revolts over executive pay and represent the “unacceptable face of capitalism.

A newly published public register, ordered by Prime Minister Theresa May in August as part of a crackdown on executive pay, names those companies where at least one fifth of shareholders rebelled against pay packages. More than a fifth of Britain’s FTSE 100 companies have so far been named.

“The data gathered for the public register reveals the true scale of investor concern and shows shareholders flexing their muscles by exercising their votes,” said Chris Cummings, CEO of the Investment Association, which published the list.

“With over one fifth of the FTSE All-Share having faced large shareholder opposition in 2017, a significant number of companies need to seriously start listening to shareholder views and acting on them,” he said.

Tackling high levels of executive pay was one of May’s promises on becoming Prime Minister, in a move to create an economy “that works not for a privileged few but for every one of us.” She said those who earned a “fortune” would be held to account by their workers.

The newly published register outlines the extent of shareholder rebellion in relation to a range of issues, including remuneration policy, director re-election and political donations. It aims to increase transparency, accountability and scrutiny of listed companies by shareholders, media and the wider public.

Pay-related issues topped the list of shareholder concerns, with 38% of resolutions listed on the register so far being due to high votes against big pay packages. The second most common concern, or 32% of those resolutions listed on the register, related to the re-election of company directors in 2017.

“Most companies are proactive and thoughtful in implementing responsible business practices but there are a minority of firms that threaten the world leading reputation of our business community,” said Business Secretary Greg Clark.

The register, he said, would help by “shining a spotlight” on the way companies respond to shareholder concerns.

Companies named include:

  • Sports Direct, where 71% voted against a proposal to pay founder Mike Ashley’s brother John Ashley an £11 million back payment.
  • Thomas Cook, where 33% voted against plans to award CEO Peter Frankhauser a bonus of up to 225% of his basic salary, which rose to £703,800 in 2016.
  • Sky, where 29% voted against a £16 million pay deal for CEO Jeremy Darroch, and 22% voted against reappointing James Murdoch as a director.
  • Fashion brand Burberry, where 32% voted against a payout to former CEO Christopher Bailey of £1.6 million in pay and £10.5 million in shares.
  • Supermarket Morrisons, where 48% voted against plans to increase CEO David Potts’ maximum long-term bonus from 240% to 300% of his basic salary – rising to 51% of shareholders including abstentions.
  • Pharmaceutical giant Astrazeneca, where 39% voted against a £13 million pay package for CEO Pascal Soriot.
  • Fashion brand Ted Baker, where 22% voted against a resolution to re-elect David Bernstein as a director.

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