Shareholders are comparing executive pay with performance and often voting down remuneration packages. How has the property industry fared?
Shareholders have made headlines across the world this year voting against pay packages, with more than half of shareholders in companies such as BP and Renault rebelling against executive remunerations.
UK real estate has also felt some of this shareholder dissatisfaction.
In nine of the FTSE All-Share property companies, more than 10% of shareholders voted against remuneration packages, although none of the votes was binding.
Vincent Latour, an analyst at shareholder lobby group Pirc, said revolts were “targeted at companies where shareholders felt unhappy about the discrepancy between the pay package of the executive directors and the performance of the company.”
He said UK real estate was not doing badly compared with some industries. No company had more than a 24% vote against, and in half of the companies it was less than 2%.
Dissatisfaction does appear to be on the rise, though.
Votes against pay packages reached the 10% mark in only four firms in 2015. This year the percentage of unhappy shareholders rose in two-thirds of FTSE property companies.
The biggest rebellion was at Raven Russia’s AGM, which saw a 23.7% vote against its executive pay package. After the depreciation of the rouble in late 2014, the hard-hit firm issued only 34% of available shareholder incentives for 2015. It also limited salary rises to inflation and offered no cash bonuses.
The biggest turnaround came from Grainger, where just 7.1% voted against the remuneration package, down from 29% last year when shareholders cited concerns over the level of disclosure on pay in the company’s annual report.
Adam McGhin, group counsel and company secretary at Grainger, said: “We were very pleased that shareholders recognised the improvements to our remuneration report and that it received a high level of support at the 2016 AGM.”
