AGM alert: would you run this FTSE 250 firm for £15m a year?

Phil Bentley’s £14.7 million for running MITIE Group (LSE:MTO) and the 10% pay rise handed to the boss of Premier Foods are in this month’s AGM spotlight.

Former British Gas boss Bentley’s annual haul was driven by £9.5 million from a one-off incentive plan put in place around the 2020/21 acquisition of Interserve.

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FTSE 250-listed Mitie points out that its market value has grown from about £400 million at the time of the Interserve deal to £1.6 billion, a fourfold increase. 

At Premier Foods (LSE:PFD), Alex Whitehouse has seen his salary rise to £620,000 as reward for a strong performance by the Mr Kipling business in the five years since taking the helm.

Mitie

When: 11.30am, Tuesday 23 July.

Where: Level 12, The Shard, 32 London Bridge Street, London SE1 9SG.

How to participate: It will be possible to view the AGM electronically via webcast, while questions can be submitted in advance of the meeting via  investorrelations@mitie.com. Proxy voting instructions should be returned no later than 11.30am, Friday 19 July. More AGM details can be found here.

Who’s in the chair? Derek Mapp, who was appointed in May 2017, is the former chief executive of pub chain Tom Cobleigh and chair of Informa.

How did the company do in the year to 31 March? Revenues of £4.5 billion rose 11% and operating profit by 30% to £210 million, resulting in an operating margin of 4.7% compared with 4% the year before. Earnings per share before one-off items increased by 29% to 12.3p. A final dividend of 3p a share worth £38.3 million is due to be paid on 5 August, resulting in an increase in the total to 4p from 2.9p the year before.

How have shares performed? Up 28% in the year ended 31 March to 105p (116p on Thursday)

How much is the boss paid? There is no increase to Phil Bentley’s salary of £900,000 for at least the next three years, meaning it has stayed the same since his appointment in 2016. Total remuneration for 2023/24 amounted to £14.7 million, up from £6.8 million the year before.

Why the big increase in total remuneration? Bentley’s overall figure was driven by £9.5 million from a one-off plan put in place around the time of Mitie’s acquisition of Interserve in 2020, a deal that took place in a period of extreme turbulence because of Covid. The company said: “Launching the takeover of Interserve in these circumstances was bold and represented a huge opportunity but also came with significant risk for shareholders and colleagues.” Mitie’s performance for return on invested capital and cost-saving synergies meant the scheme vested in full before the remuneration committee used discretion to reduce the outturn to 92.5% of the maximum. Share price appreciation from the grant level of 60.5p accounted for 39% of the final figure, with the shares subject to a two-year post-vesting holding period.

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What about his other incentives? Bentley’s total remuneration also includes an annual bonus of £1.3 million in cash and deferred shares, based on 89.6% of the maximum opportunity. The outturn had been 96.9% before the remuneration committee made a discretionary reduction of 7.5%. The vesting level of long-term incentives awarded in 2021 was also reduced from 97.5% to 90.2%, leading to a figure of £2.9 million of which 39% was due to share price appreciation.

What’s the company say about Bentley’s level of pay? It points out that shareholder return performance over the three-year period has been in the top 10 in the FTSE 250 and that market capitalisation has grown from about £400 million at the time of the Interserve acquisition to £1.6 billion, a fourfold increase. Bentley has also been “very strongly aligned” with shareholder value creation, having purchased shares worth 400% of salary in November 2016 – and has not sold any shares since appointment. In aggregate he has 13 million shares, or 1,118% of salary.

What’s in the new remuneration policy? The company is planning a CEO reward scheme that will be exclusive to Bentley as he leads Mitie through its strategy for 2025-2027. This involves the grant of long-term incentives worth 600% of salary “to motivate and retain him over the next three years”. There will be no further grants for the following two financial years. Bentley’s maximum annual bonus opportunity will be increased to 200% of salary, from 160% previously.

How did last year’s AGM go? The annual remuneration report was approved with 98.09% of votes in favour. The last vote on the remuneration policy in 2021 got 70.1% support.

How’s the company doing on diversity? Women hold 44% of board positions but not in senior roles. There are two directors from a minority ethnic background.

Experian

When: 9.30am, Wednesday 17 July.

Where: The Merrion Hotel, Upper Merrion Street, Dublin.

How to participate: Proxy voting instructions need to be returned no later than 9.30am, Monday 15 July. More AGM details can be found here.

Who’s in the chair? Former LV= chief executive Mike Rogers was appointed to the Experian (LSE:EXPN) board in July 2017 and as its chair two years later.

How did the company do in the year to 31 March? The credit checking and financial data firm recorded total revenues from ongoing activities of $7.05 billion (£5.6 billion), representing growth of 7% at constant exchange rates. Benchmark pre-tax profit rose 6% to $1.79 billion and earnings per share by 7% to $145.5 cents a share. A second interim dividend of $40.50 cents (31.74p) a share, which is up 7% on a year earlier, is due to be paid on 19 July. 

How have shares performed? Up 30% to 3,454p (3,675p on Thursday).

How much is the boss paid? The base salary of Brian Cassin, who has been chief executive since 2014, rose in June by 2.4% to £1.07 million. His total remuneration for 2023/24 amounted to £9.9 million, the highest figure since 2019/2020’s award of £10.8 million. The bulk of last year’s total came from long-term share-based incentives, which contributed £5.2 million through a vesting outcome of 93% and a further £1.5 million from share price growth and dividends. The annual bonus added £2 million, which is 97.5% of the maximum. 

How was variable pay determined? The annual bonus was driven by 7% growth in the two performance metrics ofrevenue and adjusted earnings. Factors influencing the vesting of share awards granted in 2021 included average annual growth in adjusted earnings per share of 12.5% and the $5.6 billion of cumulative operating cash flow. The weakest metric was three-year total shareholder return against the FTSE 100, which delivered 41.7% of the maximum. 

Why did the finance chief get a 16% mid-year increase? In the nine years since his appointment Lloyd Pitchford received base pay increases either in line with, or below, those given to the wider workforce. Following the significant expansion of his role to include global responsibility for Information Security and Enterprise Risk, his salary increased in November to an annual figure of £750,000. He donated his net increase to the Experian Cares Fund for the remainder of 2024 and he will not be eligible for a base pay increase in 2025.

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What’s the company say about the UK and US pay differential? To date, the company says its remuneration policy has been critical in enabling the company to attract and retain key talent. In the last 18 months, however, it notes that almost half of the companies in its sector peer group have awarded exceptional one-off share-based awards to their CEOs. “The scale and prevalence of these one-off awards has changed the competitive landscape. We will continue to monitor the impact of any developments in the UK and US external landscape with interest.”

How did last year’s AGM go? The new three-year remuneration policy was approved with 94.3% of votes in favour, while the annual remuneration report got 95.3% support.

How’s the company doing on diversity? The 11-strong board exceeds the FTSE Women Leaders Review targets, with 45% female representation and one director in a senior role, and the recommendations of the Parker Review on director ethnicity.

Premier Foods

When: 11am, Thursday 18 July.

Where: Premier House, Centrium Business Park, Griffiths Way, St Albans, Hertfordshire, AL1 2RE.

How to participate: A live videocast is available but it will not be possible to submit votes remotely during the meeting. Proxy voting instructions must be received no later than 11am, Tuesday 16 July. More AGM details can be found here.

Who’s in the chair? Colin Day, who is the former chief executive of Essentra and chief financial officer of Reckitt Benckiser, was appointed in August 2019.

How did the company do in the year to 30 March? The Mr Kipling and Sharwood’s groceries firm reported revenues of £1.1 billion and adjusted profit of £157.9 million, both up 15.1%. Earnings per share lifted 6.4% to 13.7p, while net debt fell £38.7 million to £235.6 million. A final dividend of 1.728p is due on 26 July, representing a 20% increase on a year earlier.

How have shares performed? Up 22% to 149.4p (159.8p on Thursday).

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How much is the boss paid? The base salary of Alex Whitehouse has increased for this year by 10.3% to £620,000. His total remuneration for 2023/24 amounted to £2.4 million, having achieved both the maximum annual bonus and 100% vesting of long-term incentives for the fourth year in a row. The annual bonus delivered £833,372 in cash and deferred shares, with the estimated value of long-term incentives being £978,000.

Why the big pay rise? The last five years, which is broadly aligned with when Whitehouse became CEO and Duncan Leggett the chief financial officer, has seen the group deliver a shareholder return of 381% compared with the FTSE 250’s 20% in the same period. The remuneration committee said its review positions Whitehouse’s salary just below the FTSE 250 median. The 7.5% increase to £415,000 for Leggett is between lower quartile and median. Last year the company increased the maximum bonus opportunity for the CEO from 125% to 150% of salary, with long-term incentives going from 150% to 200% of salary. 

How did last year’s AGM go? The new three-year remuneration policy was approved with 96.24% of votes in favour, while the annual remuneration report got 98.28% support.

How’s the company doing on diversity? Female board representation stands at 40%, with the requirement to have at least one woman in a senior role set to be fulfilled after the AGM. One director is from a minority ethnic background.