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Governance

About 20% of FTSE 350 companies faced ‘significant’ shareholder dissent in 2017

About 1 in 5 U.K. companies faced significant shareholder dissent at their annual general meetings in 2017, according to the Pensions and Lifetime Savings Association.

The trade body for U.K. retirement plans and their participants published its AGM voting review looking at the results and causes of shareholder dissent for FTSE 350 companies last year. The PLSA said shareholder votes at AGMs are of particular interest to U.K. pension funds because they "provide a useful indication of the strategy, governance and culture of these companies."

The association, which took dissent levels of more than 20% to be significant, found 73 companies in the FTSE 350 faced significant shareholder dissent in 2017 across 117 resolutions. In 2016, 86 resolutions attracted significant dissent across 64 companies.

Over the longer term, there has been a fall in significant shareholder dissent since a peak following the financial crisis and a subsequent focus on governance. In 2008, 99 resolutions had dissent across 60 FTSE 350 firms, and 156 resolutions were recorded in 2009 across 81 companies. The number of resolutions peaked in 2012 at 193, when the highest number of companies affected also peaked, at 84.

Executive pay remained the most controversial aspect of corporate governance. In 2017, 49 resolutions attracted significant dissent, up from 38 in 2016. Last year, four resolutions were defeated, steady compared with 2016. The number of companies facing significant shareholder dissent over pay grew to 34 in 2017, up from 31 in 2016.

"We remain concerned that too many companies are failing to communicate the link between their employment models and their wider strategy and purpose, as highlighted in our recent analysis of what FTSE 100 companies' annual reports tell shareholders about their workers," said Luke Hildyard, stewardship and corporate governance policy lead at the PLSA, in a statement accompanying the report. "Such information is important to pension funds as investors who are looking for information on the success of the companies they invest in."

All data was provided by proxy-voting agency Manifest.