City shareholders have been warned to keep up the pressure on corporate bad practice as the 2013 AGM season threatens to turn into a damp squib.
Pirc, the governance consultancy which advises some of Britain's biggest pension funds on voting, has already seen evidence that the pressure on boardrooms is easing off after last year's unprecedented so-called "shareholder spring".
By this time last year there had been a string of shareholder rebellions over excessive pay. The insurer Aviva's remuneration report was voted down, leading to the departure of chief executive Andrew Moss, while Barclays endured a large vote against, as did Inmarsat, the satellite communications group. Cairn Energy, which holds its AGM in just under two weeks, also lost its remuneration report last year.
So far there has been no repeat of last year's dissent. Inmarsat endured another rebellion at the end of last week, but the vote against its remuneration report fell from 40 per cent to 36 per cent, although it did face a blow on auditors' fees – a growing issue with investors. Some 34 per cent of shareholders dissented, compared with 8 per cent last year.
Pirc feels there has been a general easing of pressure on boards from shareholders at AGMs so far, although some companies that could provide flashpoints, such as Royal & SunAlliance, over its dividend cut, and Prudential, over pay, have yet to hold their meetings. They will be in the spotlight in less than two weeks.
A number of fund managers have privately indicated that they will be taking a softer line this year to "give companies time to respond" to criticism levelled by their investors.
A spokesman for Pirc said: "So far at least we aren't seeing the kind of shareholder opposition at AGMs that we saw last season. By this stage in 2012 we had already seen Aviva lose the vote on its remuneration report, and some other large votes against other companies."
Pirc concedes that part of the reason is that some companies have at least responded where pressure has been put on them over pay.
The spokesman said: "Certainly part of the explanation is that companies have changed their approach on pay, and as a result we've seen a corresponding drop in shareholder opposition.
"However there is a danger that results are read as indicating that, after a single season of assertiveness, shareholders have backed off again."
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