Alliance Trust survives vote on rebel shareholders’ review call

THE board of Alliance Trust yesterday won its battle against activist shareholders as Laxey Partners pledged not to return again next year with more demands.

Although many shareholders used the occasion of the trust’s 124th AGM in Dundee to rail against perceived high bonuses and pay, 79.2 per cent of voters – reflecting a turnout of about 50 per cent – rejected a move to force the board to review its management.

Katherine Garrett-Cox, chief executive, also confirmed that its loss-making subsidiary, Alliance Trust Savings, would be making a month-by-month profit by the end of the year and would be earnings enhancing by 2013,” marking “the light at the end of a long, dark tunnel”.

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Karin Forseke, the board’s incoming chairman, confirmed that Alliance was “committed to its in-house team for now” but said it would be open to reviewing a potential outsourcing deal in future.

“As a board we always have to review performance, development, and strategy. Are we on the right track – if we are not, it is our duty to keep that under review,” she said.

“Things have turned a corner. The things Katherine and her team have done over the last four years are phenomenal .It takes time to clean up and get a good strategy in place. We are just seeing the fruits of that work now. That has to continue and we are very clear on the fact we have to step it up.”

Colin Kingsnorth, chief executive of Laxey, told shareholders: “We won’t put forward a resolution next year.”

A spokesman for Laxey confirmed the hedge fund had no plans to sell its 1.7 per cent stake.

Laxey said it was “very heartened” by the 28 per cent vote – including withheld votes – supporting its resolution and called for the board to “report back to shareholders” after rival firm Aberdeen Asset Management made a written approach about a handover of management of the trust’s £2.1 billion of assets.

The remuneration report also received an 11 per cent protest vote. The trust announced that board members Hugh Bolland and Timothy Ingram, chair of the remuneration committee, have retired. Chris Masters, the trust’s senior independent director, has been appointed chairman of the remuneration committee.

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