Shareholders at Foxtons revolted against pay packages for bosses at the company yesterday, but failed to prevent large bonuses being handed to executives.
The London estate agency, which held its Annual General Meeting on Thursday, saw almost 40% of its shareholders vote against its annual pay report at its meeting, which was held virtually due to pandemic restrictions.
The estate agent came under fire after it said it would pay bonuses to executives, including almost £1m to its chief executive Nic Budden, despite taking almost £7m in government Covid support.
The company, which took about £4.4m in furlough money and £2.5m in business rates relief, will now hand Budden an annual bonus payment of £389,300 in 2020. In addition, he has also been given shares worth £569,000 under a long-term incentive scheme, which can be accessed in five years’ time.
Budden’s total pay package has increased to £1.6m compared to £1.25m the previous year.
Two of the largest shareholder advisers, Glass Lewis and ISS, criticised the pay plan.
However, the revolt from shareholders yesterday was not enough to prevent the firm’s pay plan from passing as it secured more than the 50% needed for approval.
It also revealed that almost a third of shareholders, 32.6%, voted against the re-election of Alan Giles, the chairman of its remuneration committee.
The company highlighted a “significant proportion” of voters did not agree with its pay policy and said it will “continue to engage with shareholders to ensure that it understands their views on these issues”.
The Foxtons board said in a statement: “It is clear that a significant proportion of shareholders did not agree with the decision to pay bonuses to Executives under the Bonus Banking Plan, on the basis that the company had benefited from Government support.
“This is notwithstanding that discretion had been exercised to reduce bonuses that would otherwise have been earned against agreed performance conditions by 50%, a decision that was supported by the majority of voting shareholders. This resulted in a bonus for the CEO of £389,000, which was 33% lower than the previous year and 53% lower on a cash basis.
“The new 2020 remuneration policy was designed to better align executives reward with shareholders’ interests. However in light of the votes against Resolutions 2 and 6 the Remuneration Committee will review the remuneration policy and its implementation in consultation with shareholders to ensure executive remuneration drives long-term shareholder value and stakeholder interests. The Committee will provide an update on this in the coming months.”
Annual General Meeting (“AGM”) Results:
|
Resolution * indicates Special Resolution |
For (No. of shares) |
For (%) |
Against (No. of shares) |
Against (%) |
Votes Withheld (No. of shares) |
Total issued share capital instructed |
|
1. To receive the Annual Report and Accounts. |
241,536,157 |
99.66 |
820,730 |
0.34 |
2,042,116 |
242,356,887 |
|
2. To approve the Annual Statement from the Remuneration Committee Chairman and the Annual Report on Remuneration. |
141,561,432
|
60.63
|
91,918,950
|
39.37
|
10,918,621
|
233,480,382
|
|
3. To re-elect Ian Barlow as a Director. |
236,033,634
|
97.17
|
6,881,739
|
2.83
|
1,483,630
|
242,915,373
|
|
4. To re-elect Nicholas Budden as a Director. |
202,423,781
|
82.83
|
41,963,362
|
17.17
|
11,860
|
244,387,143
|
|
5. To re-elect Patrick Franco as a Director |
242,096,143
|
99.66
|
819,230
|
0.34
|
1,483,630
|
242,915,373
|
|
6. To re-elect Alan Giles as a Director. |
158,001,714
|
67.41
|
76,386,929
|
32.59
|
10,010,360
|
234,388,643
|
|
7. To re-elect Richard Harris as a Director |
242,097,443
|
99.66
|
819,430
|
0.34
|
1,482,130
|
242,916,873
|
|
8. To re-elect Sheena Mackay as a Director. |
238,190,280
|
98.05
|
4,726,593
|
1.95
|
1,482,130
|
242,916,873
|
|
9. To re-elect Rosie Shapland as a Director. |
238,190,480
|
98.05
|
4,726,393
|
1.95
|
1,482,130
|
242,916,873
|
|
10. To re-appoint BDO LLP as auditors of the Company. |
242,091,586
|
99.66
|
824,287
|
0.34
|
1,483,130
|
242,915,873
|
|
11. To authorise the Audit Committee to determine the remuneration of the Company’s auditors. |
242,096,721
|
99.66
|
819,652
|
0.34
|
1,482,630
|
242,916,373
|
|
12. To authorise the Company to make political donations. |
238,867,970
|
98.33
|
4,058,763
|
1.67
|
1,472,270
|
242,926,733
|
|
13. To authorise the Directors to allot ordinary shares. |
241,726,402
|
99.51
|
1,188,833
|
0.49
|
1,483,768
|
242,915,235
|
|
14. To authorise the disapplication of pre-emption rights.* |
230,820,887
|
95.02
|
12,104,208
|
4.98
|
1,473,908
|
242,925,095
|
|
15. To authorise the additional disapplication of pre-emption rights.* |
240,799,781
|
99.13
|
2,125,314
|
0.87
|
1,473,908
|
242,925,095
|
|
16. To authorise the Company to purchase its own ordinary shares.* |
242,072,677
|
99.65
|
844,696
|
0.35
|
1,481,630
|
242,917,373
|
|
17. To authorise the Directors to hold general meetings on not less than 14 clear days’ notice.* |
241,333,983
|
99.35
|
1,583,190
|
0.65
|
1,481,830
|
242,917,173
|
Comments (5)
Interestingly, Foxton’s have increased their market share by 16.7% in the last 2 years (Market Share 2018 3.921% vs 4.576% in 2020)
N NW SE SW E Postcodes 2018 vs 2020 using Rightmove Market Share Data for Resi Sales Listings
Are you saying that by increasing sales it gives the CEO the right to use tax payers money for a personal bonus?
Remember your moral compass Mr Watkin.
I have no problem paying CEOs big bucks, but I do have a problem with paying for poor performance. I’ve got some FOXT shares.
The issue for the compamy is that roughly £45m has come off the topline in the past 5 years and its gone straight to the bottom line, so a business which used to make £45m profit now makes £0 – literally nothing for 3 years. Not good enough.
So the question is why hasn’t the business attacked its cost base if the topline has fallen away by £45m? Or are the fixed costs so high that in a slow market it can’t make money?
No doubt 2021 Q1 looks good and it should.
On the subject of the furlough money, Foxtons should 100% pay it back.
I’m long on Foxtons – going to keep my shares.
Many shareholders are angry but generally speaking small shareholders are apathetic .Many holding shares in SIPPs and therefore reliant on the SIPP provider acting as a conduit to register their vote .,if they receive the information in the first place.
Should imagine the revolt was much higher
Buddens pay package has been under heavy criticism before .In 2016 eyebrows were raised when he was given a 19% pay increase despite profits falling at Foxtons
He now has Robin Paterson ” activist “shareholder breathing down his neck so will need to earn his corn
It looks as if Foxtons are currently achieving 350 sales pcm which is certainly going in the right direction
Their sales inventory is just over 7,000 not that far short of Purplebricks at 9.622. The major difference of course is that Foxtons average fee is over £13,854 per sale acc.to their last results !
We shouldn’t be surprised when we see polls showing that the public detests estate agents, more so than any other profession. This is how the public views our behaviour as an industry thanks to the actions of certain firms.
This “cash grab” at taxpayers expense has been well covered by the national press in the last few days.