The A-Z of AGMs: What to expect at the annual shindig
Spring in the City means it’s the time of year when bosses have to leave their executive suites to face their companies’ owners. It’s also a rare opportunity for small shareholders to put questions to the board
A is for Awkward Squad All the big companies have them. They regularly attend annual general meetings (some are veterans of many years) and tend to ask difficult, and sometimes technical, questions that chairmen or women find it difficult to answer.
The really problematic members sometimes have things like accountancy qualifications and thus have the capacity to make directors sweat. They usually get fobbed off with the promise of a letter from the chairman or woman with the answers they want. Sometimes, it's true, they take up a lot of time and prevent others from asking questions. They can cause an F is for Fracas when the chair asks them to sit down.
B is for Board Members of which usually sit at the front of the venue, behind a long table on a raised stage for the bigger meetings. It is considered very bad form for members not to attend, particularly given that non-executive directors receive fairly handsome fees for doing this and putting in a couple of days a month. Independent non-executive directors should be in the majority, at least for companies that are governed properly.
C is for Chairman Or Chairwoman. But there aren't very many of those (see M is for Male). It's their show. They run the meeting but (if they do it properly) they should pass most of the questions on to the C is for Chief executive, who runs the company and who is the person shareholders want to hear from.
D is for Doodling Just keep your eyes on some of the non-executive directors who feel they aren't likely to be called upon to answer questions. You may be able to spot them doing this. It's a good one to add to the card if you're thinking of livening up proceedings with a game of AGM bingo.
E is for Executive There are usually at least two or three of these on the B is for Board. The C is for chief executive, the finance director and maybe one or two others, heads of important business units for example. Their pay is often one of the more heated topics of discussion.
F is for Fracas These are rare, but given the esteem in which our bankers are held, that's actually quite surprising.
G is for Glower A term for the expressions on the faces of the directors when confronted by hordes of little people past whom they are driven in their smart cars before settling down in their air-conditioned offices. That's why the AGM is such a good thing. It's the one day during which executives and other directors have to come down to earth and speak to ordinary people. G is also for goodie bag. Which you might get from some of the consumer goods companies, or retailers, if you're lucky. It's called promoting your product.
H is for Harangue Members of the A is for Awkward squad often do this, to the C is for chairman or chairwoman. Considered poor form, but given the way some companies behave you can understand why they get cross.
I is for Institutions Which never turn up. The big ones tend to be offered privileged access to directors, where they get to ask all the questions they want. Plus L is for Lunch and even W is for Wine, two or three times a year if they're lucky. Some pension funds, it's true, have recently been making an effort to attend AGMs. But they are the exceptions to the rule. I is also for interest group. Charities or other campaigning groups will often buy a share or two so they can attend and ask questions about things such as the treatment of workers, or a company's environmental policies.
J is for Joke Occasionally an enterprising chairman or chairwoman might try to crack one. Sometimes they'll even get a laugh.
K is for Kindle Worth having one of these, or a rival e-reader, if proceedings start to get dull. On it you can buy a little book for just £4 that every shareholder should read. It's called Pay Check: Are Top Earners Really Worth It? and it's by David Bolchover. If you intend to ask a Q is for Question about R is for Remuneration it's well worth reading. It demolishes most of the arguments you will hear from the chairman of the remuneration committee and will be invaluable for putting whoever that worthy is on the spot.
L is for Lunch Let's be honest, this is what it's all about for a lot of the attendees. You shall judge how a company feels about its retail shareholders by the quality of what is on offer. Board members are, in theory, supposed to circulate and chew the fat while this is being served, to give those who have not had the chance to ask a question at the meeting some quality time. L is also for legal query. Often these come from members of the A is for Awkward Squad. They are usually dismissed out of hand by the chairman after a brief consultation with his in-house legal team.
M is for Male The gender of the vast majority of company directors. There is no good excuse for this. A good subject for a Q is for Question. M is also for Media. Who can be banned from attending. Most companies don't take this step, however, because journalists can simply buy a single share, which is all you need to guarantee the right to attend.
N is for Next Year There's always that if you don't get to ask your question.
O is for Outrageous A good description for the R is Remuneration policies adopted by most of the members of the FTSE 100. And the FTSE 250 for that matter.
P is for Packed Lunch (see L is for Lunch). Some cheapskate companies have in the past resorted to handing these out rather than providing something halfway decent. You could make a case for doing this, on grounds of cost reduction, but given the sort of costs boards are happy to load on to their shareholders for employing executives, this does seem unnecessarily cheap. P is also for Point of order, which members of the A is for Awkward Squad will frequently use as an attempt to have another crack at the board after having been told to sit down by the C is for chairman or chairwoman.
Q is for Question The AGM is the one chance ordinary shareholders get to ask these, so make 'em count.
R is for Remuneration The excessive nature of this often dominates proceedings. You will be treated to a lot of tired arguments about why it is so high at board level. Most of them are self serving and don't stand up to detailed scrutiny (See K is for Kindle). R is also for Retail shareholder. Or you and me. Individuals who have small shareholdings. Most of those in attendance will be retail shareholders.
S is for Shareholder Spring The likes of which we probably won't see again. This is when anger about R is for Remuneration reached boiling point and all those I is for Institutions actually used their voting power. S is also for Security Personnel. Lots of venues are paranoid about security. You'll spot security personnel easily; they wear cheap grey suits and have little curly wires hanging for their ears. This seems to make them feel important. They are typically surly at best. And that's just the highly evolved models.
T is for Time Be warned. If you have shares in a controversial company (any of the banks for starters) you're going to find that the AGM may take up a lot of it.
U is for Union You might them represented at a lot of controversial AGMs. The TUC and some affiliated unions are planning to use the voting power of their pension funds to make some noise on issues of concern. United States unions have been doing this for a while, to the intense irritation of the corporate lobby, which doesn't like being put on the spot about things like R is for Remuneration, which gets really silly across the Atlantic.
V is for Venue For big companies with lots of small shareholders these can be quite grand. For smaller ones, with more concentrated shareholdings, it can amount to little more than a meeting room at the corporate headquarters.
W is for Wine – the quality of which says a good deal about what a company thinks about its retail shareholders. It's usually moderately good, but not a patch on what they serve up in the boardroom.
X is for X-ray As in X-ray security. We haven't yet seen these at any of London's venues, but given that many already have airport-style scanners, it's only a matter of time.
Y is for Yawn Like D is for Doodle. Very bad form if directors do this. A good one for the AGM bingo card if you can spot them at it.
Z is for ZZZZZZ Or what you'd probably want to do if it gets boring. Technically bad form, but no one will hold it against you if you take a nap.
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