Far too few retail investors are voting, says interactive investor

The investment platform industry needs to do more to encourage and facilitate shareholder voting, says CEO Richard Wilson.

When interactive investor stated last month that only 8% of customers registered to vote their shares did so in 2020, and only a quarter of ii customers had switched on their free voting facility, we did so to highlight that it is not good enough.

We wanted to get the industry talking about this important investment platform issue and looking at ways to empower retail shareholders. Richard Wilson, CEO, interactive investor, said: “I hold my hands up. There’s far more we can do to raise awareness. So I am starting now.”

An article in yesterday’s Mail on Sunday lifted the lid on this issue further, reporting that at Hargreaves Lansdown ‘less than 1% of eligible customers vote’. Different platforms may have different methodologies for analysing this, but AJ Bell did not have a figure, estimating it was in the very low percentages.

Richard Wilson, CEO, interactive investor said: “The cat is out of the bag – far too few retail investors are voting. The investment platform industry, administering billions of pounds of retail investor money in PLCs, needs to do more to encourage and facilitate shareholder voting.

“There is strength in numbers and investors’ enduring mark is ultimately made through their vote. There is no obligation to vote, but we need to be doing far more to educate and inform customers about the power of voting their shares. And if you don’t know what your platforms’ processes are on voting, it is important to ask.”

At ii, once a customer has gone into their account and switched on their voting preference, they will automatically receive updates on decisions that affect their shares, and when it comes to AGMs, they will be emailed about all supported shareholder meetings when they are uploaded to the Voting & Information portal.

In addition to this, ii has recently enhanced its shareholder voting and information page.

Last year, the most voted shares on the interactive investor platform, in rank order, were: Unilever (LSE:ULVR) Sirius Minerals, Lloyds Banking Group (LSE:LLOY), BP (LSE:BP.), Vodafone (LSE:VOD), Royal Dutch Shell (LSE:RDSB)Scottish Mortgage (LSE:SMT) Trust, GlaxoSmithKline (LSE:GSK), Rolls-Royce (LSE:RR.), Royal Mail (LSE:RMG).

Lee Wild, Head of Equity Strategy, interactive investor, says: “It’s not surprising that some of the country’s biggest companies generate so much interest when shareholders get the chance to vote at AGMs or special meetings. Lloyds Banking Group has long been the UK’s most popular shareholding and companies such as Rolls-Royce and Royal Mail have an army of vocal shareholders.

“Unilever’s vote last year to modernise its complex 90-year-old legal structure was one of the busiest we’ve seen. And, in a first for a global company, the Dove soap maker will put its climate transition plans before a shareholder vote at its AGM on 5 May. Part of its plan is to achieve zero emissions from its own operations by 2030.

“Unilever is leading the way in this area and other companies are under increasing pressure to put strategies on ESG (environmental, social and governance) issues to the vote, not just pay. If they vote in numbers, investors with smaller shareholdings can make a real difference and influence how companies behave.”

Upcoming votes and issues

This week, there are some significant developments which are a reminder of the collective power of shareholders.

Royal Dutch Shell shareholders will this week get to take a look at the oil giant’s annual report following the first ever post-war dividend cut.

Remuneration and the pay packets of chief executive Ben van Beurden and other directors are a point of focus. The oil giant's remuneration committee suggests no annual bonus on top of his base salary, although the CEO did receive £3.2 million due to a long-term incentive plan, which was down 49% on the previous year.

The remuneration committee noted that the majority of staff also received no 2020 bonus and will not receive a 2021 salary increase, which is also the case for van Beurden.

The verdict of institutional and retail shareholders on the company’s pay decisions won't be known until its AGM, which usually takes place in May. Last year's meeting saw just under 5% of shareholder votes going against the remuneration report.

Blue Prism (LSE:PRSM) (Tuesday, 16th March)

An issue at last year's AGM was the failure to disclose a specific target for the revenues benchmark within its long-term incentive plan (LTIP).

The intelligent automation business, ahead of this year's AGM, still thinks it is not in its best interests to provide fuller disclosure given this fast growing and highly competitive market.

Some 13% of shareholder votes went against the advisory resolution concerning last year's remuneration report, which based on feedback was also likely to be due to a salary increase for Chief Financial Officer Ijoma Maluza in 2019/20.

The AGM at 3.30pm on Tuesday will be a closed meeting but the company has set up a dedicated email address for shareholders to ask questions. There was a deadline of Friday afternoon for the return of proxy voting forms.

Safestore Holdings (LSE:SAFE) (Wednesday 17th March)

Safestore, listed on the FTSE 250 index, said the progress under the leadership of Chief Executive Officer Frederic Vecchioli and Chief Financial Officer Andy Jones represented significant outperformance against key competitors and industry benchmarks.

The results for 2020 were a continuation of that strong showing, with Vecchioli securing his maximum bonus opportunity in relation to 2020 trading, with the award of £630,000 contributing to overall remuneration of £1.1 million last year. The salaries of the two executive directors were increased by 1% from September but this is below the 2.3% average increase applied to the wider workforce.

Last year's AGM saw strong support for the company's remuneration report and policy, with 98% and 97% of votes in favour respectively.

Tullow Oil (LSE:TLW) (Thursday 18th March)

The sale of assets in Equatorial Guinea as part of the company's ongoing debt-reduction effort will require the approval of shareholders by a simple majority of votes cast at the general meeting. Tullow told investors that it believes an agreement on its debt refinancing can be reached in the first half of this year.

Signature Aviation (LSE:SIG) (Thursday, 18th March)

The private jet services business is being taken over by a consortium including private equity firm Blackstone and the Cascade investment vehicle of Microsoft founder Bill Gates.

The deal is worth £3.5 billion and was made possible by a rival bidder, Gatwick Airport's part owner Global Infrastructure Partners, switching camps to join the 411p a share bid.

Shareholders are being asked to vote on a scheme of arrangement ahead of virtual meetings taking place from 1.30pm on Thursday.