The number of UK firms facing shareholder rebellions rose by a quarter in the 2018 AGM season, with opposition to individual director re-elections more than doubling from the same time last year, research from the Investment Association's (IA) public register reveals.
The register was launched in August 2017 in response to the UK government's consultation on corporate governance reform, with the trade body charged with establishing and maintaining a list of FTSE All-Share companies that have received more than 20% of votes against any resolution at an AGM or EGM.
It was launched with the intention of bringing attention to companies that have received a significant vote against motions and to track whether and how they are responding to shareholder concerns.
The register has seen 65% of firms added to it made a public statement at the time of their 2018 AGM, acknowledging significant shareholder dissent and outlining how they plan to engage with shareholders, compared to only half (51%) in 2017.
Its newest data, reporting shareholder behavior up to the end of July 2018, shows 120 more FTSE All-Share listed companies being named and shamed on the public register due to shareholder dissent, compared to 110 companies over the same period in 2017, with 237 individual resolutions added in total.
Significantly, the IA found 29 repeat offender companies on the register for the exact same resolution as last year, measuring 35 resolutions in total.
Meanwhile, opposition to individual director re-elections more than doubled from 38 resolutions to 80 in 2018. FTSE 250 firms saw the largest rise in this respect, with rebellions up to 37 resolutions in 2018 compared to just 18 in 2017.
Chief executive of the IA Chris Cummings (pictured) said: "Shareholders have shown their teeth this year over FTSE 250 director re-election.
"They are using their votes to hold individual directors to account for decisions they made on issues such as executive pay and board diversity, as well as concerns that individual directors do not have the bandwidth to fulfill their roles as they spread themselves too thinly on too many boards."
Elsewhere, executive pay declined overall as an issue for FTSE All-Share companies, with the total number of remuneration resolutions dropping from 68 in 2017 to 61 in 2018.
Within the FTSE 100, however, this year saw 18 pay resolutions attracting over 20% shareholder dissent, up from nine in 2017, resulting in the number of the index's companies on the register growing from eight in 2017 to 15 in 2018.
Cummings said the "disappointing jump" demonstrated that "shareholders clearly remain unimpressed with the approach to pay last year, and are frustrated the message is not getting through to some boardrooms".
He added: "FTSE 100 companies must do more to ensure the pay packets of their top team align with company performance and remain at levels that shareholders find acceptable.
"Now in its second year, the IA's public register is already driving change and accountability.
"Shareholders now need to see companies acting on their pledges to deal with investor concerns or risk facing another backlash next year."
Business minister Kelly Tolhurst added: "This register is one of a package of reforms by the government to upgrade our corporate governance, including board diversity and CEO pay ratio reporting, to make our largest companies more transparent and accountable to their staff and shareholders.
"We will continue to work with business to ensure the UK remains the best place in the world to work, invest and do business."
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