Revealed: How L&G fought to nail the fat cats
Wednesday 01 May 2013
Legal & General Investment Management held 15 meetings with Xstrata and Glencore last year to discuss concerns about their £56bn merger, it has emerged.
The fund manager, a top 10 investor in each company, said it had "consistently disagreed" with the remuneration packages both parties hoped to hand to executives, including Xstrata's chief executive Mick Davis, who was set to pick up about £30m at one stage.
"LGIM was pleased to see the deal complete without the retention packages," the investor revealed in its 2012 Corporate Governance Report. "Other shareholders went public on their stance whilst we kept our meetings with the company and voting intentions private as we felt, that in this instance, keeping discussions confidential was a more constructive approach."
The report, published yesterday, gives a rare insight into the workings of one of Britain's most private fund managers, which last year voted at 591 annual general meetings across the country, casting 9,475 votes.
In terms of its other highlights, L&G said it held 11 private meetings with Barclays to discuss the "disconnect between pay and long-term performance" at the troubled banking group.
The company said it voted against the re-election of Alison Carnwath as chairman of Barclays' remuneration committee before she quit, and played leading role in the subsequent appointment of the bank's new chairman and chief executive. L&G controls about 3.5 per cent of Barclays.
It also said it voted against the re-election of James Murdoch as chairman of BSkyB before he stood down and the £17.6m pay package handed to WPP chief executive Sir Martin Sorrell.
Last year, The Independent revealed that L&G was the leader of the shareholder spring, which saw an unprecedented number of companies held to account for poor practice on issues such as bosses' pay. Between April and June, L&G, which holds about 4 per cent of the UK stock market, opposed management resolutions at 76 companies, more than half the already high total of 125 "no" votes for the whole of 2011.
It even voted against other insurers, including Aviva, whose chief executive Andrew Moss quit in May as a casualty of the shareholder spring. By June, the fund manager's corporate governance unit was opposing management resolutions at a third of annual meetings.
"As individuals, most of us lack the scale to bring about change. As one of the UK's largest asset managers, we have a responsibility to exercise client voting rights and influence change efficiently and effectively," L&G added in the report.
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