The anticipated backlash by shareholders against Foxtons’ issuance of new shares to raise £22m failed to materialise at yesterday’s AGM.

All the resolutions on the agenda were passed with only one failing to gain less than 80% support. That was the item relating to the company’s remuneration policy and it went through with a 78.41% majority.

Foxtons’ statement to the markets said:

The Board is pleased that all Resolutions were passed and would like to thank our shareholders for their continued support. 

While the Board is satisfied with the level of support achieved for Resolution 2 (to approve the Directors’ Remuneration Policy), which was passed with a substantial majority of 78.41%, it is acknowledged that a number of shareholders voted against the proposal. 

As explained in the Company’s Annual Report for the year ending 31 December 2019, in preparing the 2020 Directors’ Remuneration Policy, the Remuneration Committee carried out an extensive shareholder consultation exercise with its largest shareholders and their representative bodies, the results of which are explained fully in the 2019 Annual Report.

The Committee was pleased that the majority of our largest shareholders were supportive of our original proposals, with some changes made to the final Policy to reflect shareholder feedback. 

The Board believes that as a result of this consultation exercise it has a good understanding of the reasons why some shareholders were not supportive of the Policy, the main reasons for which are explained fully in the 2019 Annual Report and are summarised below:

·    Unconventional incentive structure, in particular the use of Restricted Shares

·    Quantum of award under the Restricted Share Plan

·    Discretionary nature of the underpins on incentives

The Committee believes that a vote of 78.41% in favour is a satisfactory outcome in the circumstances and that the proposed Policy is the best structure to provide strong alignment with shareholders’ interests in a highly cyclical business such as Foxtons.  

We therefore do not intend to make any changes to the Policy. 

However, in line with the provisions of the UK Corporate Governance Code, the Remuneration Committee will seek to engage with those shareholders who did not support the Policy to confirm its understanding of the reasons for their voting.

The Remuneration Committee will provide an update on this process within six months.

Investors could voice their displeasure at Foxtons AGM