2013 AGMs: Key trends and issues from a review of 215 FTSE 350 companies June 2013 Statistics Commentary RESOLUTIONS Annual re-election of all directors 99% (213 companies) proposed annual re- 3% (7 companies) amended their articles to election of all directors reflect annual re-election Authority to allot shares: extra one 67% (144 companies) proposed a resolution This is similar to the results for 2012 third authority for the extra one third authority; 27% (57 companies) included a statement that where Under the UK Corporate Governance Code this extra one-third authority was used, the (Code) FTSE 350 directors should be subject directors would stand for re-election to annual election, so no longer necessary Any resolution to convene general 84% (181 companies) passed a resolution to NAPF recommends that companies should only meeting on 14 days’ notice convene a general meeting on 14 clear days’ call a general meeting on 14 clear days’ notice notice; 73% (158 companies) stated the in limited circumstances and these should be circumstances where meetings will be held on explained when tabling the resolution 14 clear days’ notice Details of any unusual resolution Resolutions proposed to approve an increase A few companies have increased this to in maximum aggregate fees payable to around £700,000 to allow them to appoint directors non-executive directors to the board Details of substantial vote (10-49%) 15% (33 companies) detailed substantial votes So far this year no FTSE 350 company has had against the directors’ remuneration against the directors’ remuneration report an outright defeat (4 did in 2012) report easyJet Plc – 44.71% Ocado’s remuneration report was given a “red Inmarsat plc – 35.76% top” alert by the ABI Jupiter Fund Management plc – 31.49% Synthomer plc – 31.11% The average vote against the re-election of Lonmin plc – 29.03% directors remains relatively unchanged which National Express Group – 28.48% suggests few members are challenging Millennium & Copthorne Hotels plc – 26.32% executive pay by opposing director re-election Balfour Beatty plc – 24.79% Towers Watson say of 35 FTSE 100 chief Ocado Group plc – 23.46% executives who have disclosed their salaries Hunting plc – 22.18% for 2013, 11 have frozen their pay and the Capital & Counties Properties plc – 22.03% median increase was 2.5% below inflation Rightmove plc – 21.88% Glencore International – 21.73% Persimmon plc – 21.72% Anglo American plc – 21% Reckitt Benckiser Group plc – 18.23% African Barrick Gold plc – 17.05% Taylor Wimpey plc – 16.34% Tullett Prebon plc – 16.13% G4S plc – 15.47% Reed Elsevier plc – 15.01% Fidessa group plc – 14.72% Intercontinental Hotel Group plc – 14.27% Centamin plc – 13.83% 888 Holdings – 13.38% Aviva plc – 13.26% Playtech Ltd – 12.04% A G Barr plc – 11.82% Aberdeen Asset Management plc – 11.41% Prudential plc – 11.6% HSBC Holdings – 11% Resolution Ltd – 10.47% Imperial Tobacco Group plc – 10.44% Details of any resolutions not passed Only 2% (4 companies) failed to pass Glencore International – resolutions approving resolution(s) the election of directors Kentz Corporation Ltd – resolution to approve changes to LTIP were withdrawn easyJet plc – resolution to approve disapplication of pre-emption rights and to call general meetings on 14 clear days’ notice Anglo American plc – resolution to approve the disapplication of pre-emption rights www.blplaw.com Page 01 © Berwin Leighton Paisner 2013 AGMs: Key trends and issues from a review of 215 FTSE 350 companies June 2013 Statistics Commentary REMUNERATION REPORTS Early compliance with the revised 53% (113 companies) have adopted elements For AGMs held in the first financial year on or reporting requirements for directors’ of the Government’s proposals early after 1 October 2013, companies will be remuneration required to produce a directors’ remuneration report containing a Policy Report on the future remuneration policy and an Implementation Report on the previous remuneration policy Some companies have chosen to split the report into two sections now but are seeking support for both as a single advisory resolution at the 2013 AGM Inclusion of a single pay figure for 62% (133 companies) have included a single The Implementation Report will need to each director pay figure for each director include a single figure of pay for each director reflecting actual pay earned CODE COMPLIANCE Explanation of non-compliance with 45% (97 companies) provided explanations of Non-compliance explanations include non- the Code non-compliance with the Code compliance with B.1.2 (half the board should comprise NEDs, excluding the chairman) to D.2.1 (composition of remuneration committees) Disclosure of board policy on 4% (9 companies) did not provide details of This was a new requirement under the Code diversity including gender their policy on diversity, including gender for financial years beginning on or after 1 October 2012 Board conducted performance 30% (65 companies) used a questionnaire Under the Code, the board should state how evaluation using a questionnaire only only for performance evaluation performance evaluation of the board and its committees have been conducted Board conducted performance 29% (63 companies) used interviews and evaluation using questionnaires and questionnaires for performance evaluation interviews with members of the board Board conducted performance 22% (47 companies) used interviews for evaluation using interviews with performance evaluation each board member only Board used external evaluators 62% (134 companies) have used external Under the Code, evaluation of the board evaluators (this covers the period from 2009 should be externally facilitated at least every to date) three years External audit to put out to tender in 4% (9 companies) put the external audit out Code Provision C.3.7 states that FTSE 350 current financial year to tender companies should put the external audit out to tender at least every ten years. This provision applies for financial years beginning on or after 1 October 2012 (2012 Code) Statement whether or not company 61% (132 companies) published a statement The FRC is encouraging companies to state, anticipates putting audit contract out on this when they first report against the 2012 Code, to tender and when whether or not they anticipate putting the contract out to tender in due course The findings set out above are based on factual information compiled by PLC What’s Market database This document provides a general overview only and is not intended to be comprehensive. Specific legal advice should always be sought in relation to the particular facts of a given situation. www.blplaw.com Page 02 © Berwin Leighton Paisner.