Companies warned for failing to address shareholder rebellions

The Investment Association has contacted more than 30 British companies, including media giant WPP and drugs firm AstraZeneca, to express concerns over how shareholder revolts are being handled.

The influential body, which represents some of the UK’s biggest institutional investors, has written to 32 companies currently listed on the Public Register. The Investment Association set up the online register in 2017, with the government’s backing, to track companies that see significant shareholder opposition at annual meetings.

The companies singled out by the Investment Association have seen shareholders vote against the same resolution for two years running.

Andrew Ninian, director of stewardship and corporate governance at the Investment Association, said most companies engage with shareholders once they appear on the Public Register, but a “frustrating number” were failing to address concerns.

“Appearing on the Public Register should act as a warning to companies that their shareholders are concerned about an aspect of the company’s governance,” he said.

“We hope that the increased focus on these repeat offenders will encourage them to engage with their shareholders and ensure their concerns are being addressed. The risk if they do not is greater investor concern in the future.”

The Investment Association wants the companies it has contacted to update shareholders on what engagement they have had since the AGM; what views they have received from investors; and what actions have been taken.

AstraZeneca and WPP have both faced investor backlashes over pay, with 30% of WPP’s shareholders failed to back the media giant’s remuneration report in June.

Other companies contacted by the Investment Association include Berkeley Group, AA, Games Workshop, Investec and Mitchells & Butlers. In more than half of the letters sent out, the shareholder rebellions centred on excessive executive pay.

Companies from the FTSE All-Share Index are included on the Public Register if more than 20% of votes are cast against a resolution.

The Investment Association has 250m members which between them manage assets of £7.7trn.