AGM alert: possible anger at big bonus and no dividend

An improved £1.3 million bonus for Alex Baldock has the potential to stoke AGM tensions following a year when Currys (LSE:CURY) shareholders missed out on another dividend.

More than 20% of votes were cast against the pay report at 2023’s AGM due to concerns over Baldock’s £450,000 bonus and the company’s choice of performance measures.

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This year’s award of cash and deferred shares is based on 94.21% of the maximum opportunity and follows the delivery of underlying earnings at the top end of the bonus scale. His remuneration for the year amounted to £2.4 million.

Berkeley Group

When: 11am, Friday 6 September.

Where: Herbert Smith Freehills, Exchange House, Primrose Street, London EC2A 2EG.

How to participate: Proxy voting instructions should be returned no later than 11am, Wednesday 4 September. The notice of Berkeley Group Holdings (The) (LSE:BKG)'s AGM can be found here.

Who’s in the chair? Former Schroders chief executive Michael Dobson was appointed in June 2022.

How did the company do in the year to 30 April? The housebuilder delivered 3,521 new private and affordable homes, of which 87% were on regenerated brownfield land. Pre-tax profits of £557.3 million were in line with guidance at the start of the year as earnings per share fell by 12.4% to 373.9p. Net cash increased by £122 million to £532 million. The annual commitment to return £283 million to shareholders includes July’s payment of 33p a share and a 174p special dividend that is due to be paid in September.

How have shares performed? Up 6% to 4,714p (4,958p last Thursday 8 August).

How much is the boss paid? Rob Perrins, who has been chief executive since 2009, continues to receive fixed pay of £597,000 after no changes were made to executive director salaries for the current or previous financial year. His total remuneration amounted to £8 million, the maximum allowed under the cap put in place for the financial year. This result was driven by £7.4 million from the 100% vesting of options under the company’s previous long-term incentive plan. Performance was measured against the targets of cumulative return to shareholders since 2011 and the 12 months to 30 September, as well as on the financial targets of cumulative return on equity and cumulative profit before tax. 

How does the current remuneration policy work? Long-term incentives are split between a restricted share plan and a long-term option plan. Annual grants of restricted shares are made from September, with vesting after four years subject to return on equity and strategic underpins. A one-off grant of one million share options was made to Perrins in 2022/23. These shares will vest in five equal tranches between September 2026 and 2030 based on an initial exercise price equal to the higher of the share price at grant and £48.50. The exercise price of the options increases by £2.50 per year from September 2027 onwards.

How did last year’s AGM go? The annual remuneration report was approved with 86.4% of votes in favour.

What’s the company view? Berkeley’s remuneration committee says the policy, which was approved at the 2022 AGM but with 39.7% of votes cast against,reinforces long-term decisions and aligns with the interests of shareholders. The arrangements also reflect the lack of annual bonus within the incentive structure.

How’s the company doing on diversity? Female representation on the board stood at 44.44% at the end of April, including in one senior role. The group meets the ethnic diversity target set by the Parker Review, with one non-executive director identifying as being from an ethnically diverse background.

Currys

When: 11am, Thursday 5 September.

Where: Hilton London Kensington, 179-199 Holland Park Avenue, London W11 4UL.

How to participate: Proxy voting instructions should be returned no later than 11am, Tuesday 3 September. More AGM details can be found here.

Who’s in the chair? Ian Dyson, who is the former chair of ASOS and chief executive of Punch Taverns, joined the board in September 2022.

How did the company do in the year to 27 April? Revenues from continuing operations fell by 4% to £8.5 billion, with UK and Ireland sales down by 2% on a like-for-like basis. Adjusted profit rose by 10% to £118 million while year-end net cash of £96 million represented a £193 million year-on-year improvement. There was no dividend payment in the year.
How have shares performed? Up 9% to 61.75p (75.50p last Thursday).

How much is the boss paid? A 4% pay rise for Alex Baldock has taken his salary to £980,360. His total remuneration for 2023/24 amounted to £2.4 million, including cash and deferred shares worth £1.3 million after the annual bonus scheme paid 94.21% of the maximum opportunity. More than half this outcome related to an adjusted earnings figure of £213 million, which was at the upper end of the target range. There was no vesting of long-term incentives due to the company’s three-year record on total shareholder return against 21 European specialty retailers and on cumulative cash flow, which came in at £80 million compared with the threshold target of £504 million.

What happened at last year’s AGM? The remuneration report was approved with 78.9% of votes in favour. Concerns expressed by shareholders included the level of bonus payments in light of the business performance and the choice of measures used in both short and long-term incentives. Baldock was paid £2 million in 2022/23, including £977,000 variable remuneration made up of £527,000 in long-term incentives and £450,000 from the annual bonus scheme.

What’s the company say? This has been a year of good progress in what remained a challenging economic and consumer environment in both the UK and in the Nordics. At the start of the year, we set out to keep up our momentum in the UK&I, to get the Nordics back on track, and to make sure we stay financially strong, and we’ve done all three. We ended the year significantly ahead of the expectations at the start of the year.

Has discretion been used? In order to align the 2023/24 award of long-term incentives with the shareholder experience during a time of market volatility, the remuneration committee applied a 15% scale back to the normal award level. This results in awards to the executive directors of 212.5% of salary compared to the normal level of 250%.

How’s the company doing on diversity? Board diversity by ethnicity is 11.1% and by gender 44.4%. One senior role is occupied by a woman.

Watches of Switzerland

When: 2.30pm, Tuesday 3 September.

Where: 36 North Row, London W1K 6DH.

How to participate: Proxy voting instructions should be returned no later than 2.30pm, Friday 30 August. More details about Watches of Switzerland Group (LSE:WOSG)'s AGM can be found here.

Who’s in the chair? Ian Carter, who joined the board in November 2020, is former CEO of Hilton International and has 30 years’ experience of international and retail businesses.

How did the company do in the year to 28 April? The luxury watches retailer, which trades thorough brands including Mappin & Webb and Mayors, reported unchanged revenues of £1.54 billion. This followed 11% constant currency growth in the United States, offset by a 5% decline in the UK and Europe due to pressure on discretionary spending. Adjusted earnings fell 18% to £134.7 million and pre-tax profits by 40% to £92 million. The company does not pay a dividend.

How have shares performed? Down 59% to 344p (371.80p last Thursday).

How much is the boss paid? Brian Duffy’s base salary remains at £500,000 after executive directors elected not to receive October’s increase, with the wage budget instead focused on pay rises for lower paid workers. No bonus was paid to Duffy in respect of 2023/24 after adjusted earnings of £134.7 million came in below the minimum £163.5 million. The £399,850 from the 100% vesting of long-term incentives took Duffy’s single figure remuneration to £925,039, down from £3.3 million the year before. Cumulative adjusted earnings per share accounted for 80% of the vesting outcome, with the performance of 132.5p well above the maximum target of 114.6p. Average return on capital employed of 24.9% was above the top threshold of 23.2%, accounting for the remaining 20% of the scheme. Share price depreciation meant the value of the long-term incentives fell from 2021’s original face value of £1 million.

How did last year’s AGM go? The annual remuneration report was approved with 97.36% of votes in favour.

How’s the company doing on diversity? The business achieved its highest ever ranking

in this year’s FTSE Women Leaders Review, featuring at number 10 in the FTSE 250 category.  The gender split of the board is 43% female, including in one senior role. The company also meets the Parker Review target for each FTSE 250 company to appoint at least one member of the board from a minority ethnic background by 2024.