AGM Alert 2018 guide published

We have now published our AGM Alert 2018 guide for company secretaries and general counsel of UK premium-listed companies. The AGM Alert 2018 covers legal and regulatory changes, market practice and guidance on topical issues, including the FRC’s reminders on company reporting following the collapse of Carillion plc.

This year, the pressure on business to justify its role towards wider society continues to have an impact. Attention will be particularly focussed on key issues such as directors’ pay and accountability. In addition, the new Investment Association public register of shareholder dissent means that information about controversial business at 2017 and 2018 FTSE AGMs, and how companies have reacted, is now easy to access and compare.

A summary of key points for 2018 is set out below. To access the full guide, please visit our Linklaters Knowledge Portal.

Please note: The Knowledge Portal is an online subscription service, available exclusively to our clients.

Shareholder engagement
  • Companies should consider how they have reacted in the past to significant shareholder dissent and what they will do to respond if any of the resolutions put to the 2018 AGM receives more than 20% of votes against.
  • The new public register of shareholder dissent highlights where there is a significant lack of investor support for resolutions at FTSE AGMs.
AGM business
  • Companies should consider what authorities they need and how to justify these to shareholders, although there is no change to the investor guidance on seeking and using share capital authorities.
  • Elections of directors are under greater scrutiny and the trend is for more of these to be voted against by investors. Companies should consider relevant corporate governance issues, such as whether progress is being made on diversity.
  • Amendments to articles are not required. Any changes to allow for electronic meetings should be carefully considered as these may be opposed by investors if they allow for fully electronic general meetings to be held.
Company reporting
  • This year most listed companies must provide more detail on non-financial matters and new information on bribery and anti-corruption.
  • The quality of reporting in longer-term viability statements remains under scrutiny and companies should consider new guidance for improving these.
  • Outside the annual report, this year companies need to disclose, for the first time, information about differences between male and female pay, how quickly payments made to suppliers are processed and the company’s attitude to tax.
Directors’ remuneration
  • The focus on whether levels of directors’ pay are appropriate will continue this year. Companies should bear this in mind when setting out pay proposals.
  • Companies will also need to start preparing for the new requirements in the Government’s corporate governance reform plan, in particular, the new CEO to average UK worker pay ratio.
  • In addition, investors expect pay awards to be adjusted or capped, where appropriate, so companies should review their incentive plan rules and pay policies.