2018 FTSE 100 Proxy Season Review

Getting ready for next proxy season: FTSE 100 review

In preparation for the 2019 proxy season, CGLytics has released its third annual FTSE 100 Proxy Season report. The report provides boards with key insights and takeaways from the 2018 proxy season, in order to aid preparation and ensure companies are adequately prepared to engage.

The 2018 proxy season saw a higher dissent from shareholders on director re-elections than previous years. This sends a strong message to directors that they will be held directly accountable for their individual actions.

The report highlights an increasing focus from investors on key governance issues such as disclosure quality, director election, board effectiveness, CEO pay and Environmental Social Governance (ESG) practices.

Once again CEO pay continued to be a key theme with shareholders concerned with pay equity, transparency, executive pay levels, and pay for performance. In particular, pay for performance is a main area of concern for investors, and the CGLytics study shows that almost a third of the FTSE 100 companies have significant misalignment between pay and performance over a one and three year period.

 

“On average, 30% of FTSE 100 companies show significant misalignment between pay and performance”

 

Download the report in full

 

Other key takeaways from the CGLytics FTSE 100 Proxy Season report:

  • Average total shareholder return decreased despite average total pay increase to £4.9 million.
  • The number of resolutions opposing individual director re-elections doubled, from 38 in 2017 to 80 in 2018.
  • Highest shareholder revolts on remuneration reports for the 2017 year: Royal Mail, Persimmon, Astra Zeneca, BT Group, Unilever and CRH.

 

Pay for Performance (P4P) alignment over a one and three year period

 

*Companies that are situated within the grey area are considered companies that have a strong alignment between pay and performance. The companies above the grey area show a misaligned pay for performance and companies below the grey areas show conservative practice.

 

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