SHAREHOLDERS are still rebelling against high director pay although dissent has reduced significantly among larger listed companies, a new report has found.
KPMG said that the “shareholder spring” has re-emerged among small cap companies instead of large ones, with Scotland having the highest number of companies with shareholders showing significant dissent over pay.
The KPMG remuneration team found that 16 per cent of smaller listed companies in Scotland saw more than 20 per cent of shareholders voting against the remuneration report - with one fifth representing a “hallmark of significant shareholder dissent”.
Last year shareholders voting against pay practices at large companies led to the departure of directors such as Bob Diamond, former chief executive of Barclays Bank, Andrew Moss the chief executive of insurance giant Aviva, and Sly Bailey, chief executive of newspaper group Trinity Mirror.
KPMG declined to disclose the names of the firms involved in its latest research. Most smaller cap companies announce the result of votes held at annual general meetings by confirming that “all resolutions put to shareholders were duly passed”.
Eddie Norrie, director of people services at KPMG in Scotland said the shift in shareholder dissatisfaction was due to efforts made by larger companies to improve practices, procedures and communications on their pay policies.
He said: “It would appear from this analysis that the smallcaps have some catching up to do with their larger listed peers. Bigger companies tend to spend more time and resources on shareholder communications.”
KPMG added that new BIS regulations coming into force next year will oblige companies to produce two reports on pay.
One report will require companies to set out their remuneration policy for the next three years for approval in what will be a binding vote, where currently the vote is only advisory.
KPMG analysed shareholder voting at AGMs up to 31 May.