Rather like the state opening of parliament, annual general meetings used to be a combination of the ceremonial and the procedural. There was the usual business of reappointing the auditors and re-electing various directors. Then a bit of a pep talk from the chairman, followed by some questions, rounded off with a few sandwiches.
You might get a few awkward questions. Marks & Spencer's chairman often had to deal with some direct feedback from hosiery purchasers. Bank boards might have had to listen to a whine about some branch manager or other. I once heard a shareholder denounce BHP Billiton for producing an annual report that was too big to fit through his letter box.
But in the past few years, the annual meeting has become almost an ordeal. First came the environmentalists and other activists, who have learned they can use it as a high-profile forum for airing their grievances. Then, from somewhere, the City found its voice on the subject of executive pay.
That revolution has claimed three scalps already: Dave Brennan has 'retired' at AstraZeneca, Sly Bailey is on her way out of Trinity Mirror and this week, Andrew Moss stepped down at Aviva. Progress at last, you may think.
Of a sort. To understand my scepticism, consider this quote from Gareth Davis, chairman of William Hill: "I am a man of my word and I will not renege on that deal," he said of the £1.2m 'retention bonus' paid to chief executive Ralph Topping.
Excuse me? Almost half of your shareholders just voted against this, yet your word counts for more than their votes? Who owns the company here?.
Or how about this, from outgoing Aviva chairman Colin Sharman: "We recognise a number of shareholders felt we have not reflected their views. For that, the board and I apologise." So that's "sorry we didn't listen," not "sorry we blithely paid this guy a king's ransom to underperform all our peers and the market."
Furthermore, having underachieving chief executives fall onto their swords does not solve the problem if their successors are appointed on similarly over-generous terms. It might be no bad thing if one or two non-executives presiding over remuneration committees moved on, too.
Then, there's the severance arrangements. Most people understand that if a company dispenses with their services, then they can expect some compensation for that. But if they leave of their own volition to take their chances elsewhere, they cannot. If only the same applied in boardrooms. Mr Moss resigned, it appears. So why is he getting a £1.7m farewell?
We have a way to go, I think. If you agree, then take a look at Alistair Blair's proposal for enfranchising individual shareholders with nominee accounts.
visible-status-Public story-url-Editorial 11.05.12.xml
