Standard Life yesterday proved yet again that unlisted life company boards must do something pretty awful before any of their proposals are actually voted down by policyholders or members.
True, yesterday did see a protest vote on remunerating directors, but at the end of the day, the board’s proposals were carried, and board members can now look forward to millions of pounds in collective bonuses, pension contributions, etc.
Coming after Equitable Life awarded its chairman Vanni Treves a hefty bonus in return for handing policyholders a knife with which to cut off their own legs – i.e., voluntarily vote to slash their own pensions as part of a “rescue plan” – the contrast to shareholder activism is becoming increasingly clear cut.
This begs the question of what might have happened had these been Plcs in the first place.
Enter the example of GlaxoSmithKline, which proposed an obscene remuneration package worth some £25m on behalf of chief executive Jean-Pierre Garnier, but which was voted down at the firm’s AGM in May last year.
The people were not amused, as the saying goes, and more than 50% of the votes went against the proposal in what was seen as the biggest ever slap in the face of a FTSE company.
There is, however, a delicious irony attached: among the institutional shareholders most vocal about voting against “JP” was…Standard Life.
Enter the National Association of Pension Funds, the institutional friend that has significant clout in recommending which box should be ticked by shareholders voting at AGMs of listed companies, including insurers.
The NAPF was instrumental in drawing up a Statement of Principles on Shareholder Activism in late 2002.
”The principles make it clear that if companies persistently fail to respond to concerns, institutional shareholders and investment managers, Institutional Shareholders’ Committee members will vote against the Board at general meetings,” the NAPF states.
So, back to Standard Life’s meeting yesterday: perhaps if members had had the same propensity for action as seems to be the case with shareholders, then the company might not have ended up in its current position.
Despite improved risk appetite
FOS award limit increase
Relates to 136 million transaction reports
Ceremony will take place 13 November