The Corporate team at Lexis®PSL has published its Market Tracker Trend Report - AGM season 2016.
The report is split into three main sections, covering:
- narrative reporting - a look at the latest developments in the narrative reporting disclosures made in annual reports and accounts;
- AGM notices - a consideration of the resolutions proposed at the AGMs; and
- voting results and trends - an analysis of any interesting results at the AGMs and any notable patterns in shareholder voting that arose, particularly significant votes against resolutions.
Notable findings include:
- 70% of FTSE 100 and 56% of FTSE 250 companies surveyed reported full compliance with the Code, compared to figures of 55% and 51% respectively for the 2015 AGM season;
- The Code provision most often not complied with was B.1.2, requiring that at least half the board (excluding the chairman) should comprise independent non-executive directors;
- Four out of the five provisions most often not complied with relate to the existence and contribution of independent non-executive directors to the board and the various governance committees;
- Compliance with Code provision D.1.1, relating to performance-related remuneration for executive directors, has deteriorated in comparison with the 2015 season;
- Gender diversity remains largely unchanged on the previous season, other than an improvement in the headline figure for more than 25% female representation on the board (however a third of companies still have less than 15% female representation on the board);
- Companies appear compliant with the risk management and internal control disclosures required under Code provisions C.2.1, C.2.2 and C.2.3;
- The findings in relation to the resolutions proposed within AGM notices remain largely unchanged from the 2014 and 2015 AGM seasons, although we note the significant increase in the number of companies seeking the additional disapplication of pre-emption rights for use in connection with an acquisition or specified capital investment;
- Of those companies with significant votes against a resolution, over half were against their non-binding resolution on the directors' remuneration report; and
- While remuneration grievance across the survey appears lessened, certain companies continue to propose executive rewards way beyond shareholder expectations.
For access to this and other Market Tracker Trend Reports, please visit the Lexis®PSL Corporate law blog.
This article was written by the Corporate team at Lexis®PSL. For further information about the report, please contact Ed Davies at Lexis®PSL Corporate.