Last week’s Foxtons AGM ‘must serve as a wake-up call for the board’

Foxtons investors have rallied against an almost £1m bonus for the firm’s chief executive in recent days.

Close to 40% of investors voted against the bonus for the chief executive at its Foxtons’ annual general meeting last Thursday.

The estate agent has been criticised in recent days for paying significant bonuses to executives, despite receiving almost £7m in government Covid support.

The company, which took about £4.4m in furlough money and £2.5m in business rates relief, has agreed to 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.

Foxtons, which has already come under attack from two of the largest shareholder advisers, Glass Lewis and ISS, for the pay plan, is now being criticised by Catalist Partners following last week’s AGM vote.

A spokesperson said: “[The] vote must serve as a wake-up call for the board. Shareholders are alert to the culture of entitlement that has squandered the company’s many advantages, and confirms the need for incentives linked to new, objective and ambitious targets.

“That so large a proportion of shareholders chose to vote against the renumeration package and the re-election of both the REM committee chair and CEO, can’t be ignored. The Board must act.

“Foxtons has a strong brand and great potential but years of underperformance can and must be reversed.  We have identified to the board actionable steps that we believe would address this decline, and in doing so, the company’s leadership should rightly be rewarded, but for clear outperformance, not just riding the wave of a market recovery.

“We hope the vote will encourage the company to urgently engage with us and other shareholders to set Foxtons on a path to rejoining the FTSE250.”

The spokesperson for Catalist Partners, which has a 2% stake in Foxtons, told Property Industry Eye last week that they are trying to engage with Foxtons’ management team, having written to the company twice this year – to try to get management to amend its strategy as they believe it is significant undervalued relative to the platform’s potential.

They say that their main concern is that the management’s current strategy at Foxtons is failing.

In a letter sent to Budden a week ago, Robin Paterson, the estate agency veteran who co-founded Catalist, said that benchmarking compensation to a FTSE 250 company was reasonable only if it was “matched” by financial performance.

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4 Comments

  1. AlwaysAnAgent

    Budden’s judgement is being called into question by shareholders and he doesn’t seem to give two hoots.

     

    But by behaving in this way he is creating a culture that appears negative, grasping, and uncaring as far as COVID and the economy is concerned.
    Boards which approve bonuses before repaying COViD emergency support monies are going to be hammered … for a long while.

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  2. watchdog13

    Furlough was designed to protect jobs. Would a business made staff redundant without it? If the answer is yes then it was used correctly.
    the reason to make staff redundant would be to protect the business and the bottom line, therefore if it was possible to protect both staff and profitability, is that the right thing to do?

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  3. Gangsta Agent

    you could not make it up

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  4. UKisgreat

    Unbelievable. Greed! Take tax payers money and pay the execs huge bonuses. Absolute disgrace.

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