De La Rue’s (DLAR) big showdown with activist investor Crystal Amber Fund proved rather less dramatic than their scathing exchange of words last week. At the annual general meeting (AGM) some 91 percent of shareholders approved the re-election of chairman Philip Rogerson, seemingly ending the fund’s hope of exerting any influence over the company’s future leadership.
Having announced his intention to retire at the end of June, Mr Rogerson plans to stay until he finds a replacement for the departing chief executive, Martin Sutherland. But the group’s second largest shareholder was demanding Mr Rogerson step down either at or before the AGM, threatening to convene an extraordinary general meeting to replace him with their preferred candidate. With the vote representing around 80 per cent of the issued share capital, it would appear the vast majority of shareholders disagree with the fund, if not their approach.
Despite the overwhelming support for Mr Rogerson, Crystal Amber is not yet ready to concede defeat. “Our position remains unchanged”, says the fund’s manager, Richard Bernstein. “We feel he needs to stand down and if he won’t give the market that visibility, then our position is to seek his removal.” Mr Bernstein wouldn’t be drawn on a timeframe.
This particular victory for De La Rue is not to say it emerged unscathed. The banknote printer narrowly survived a major revolt over its remuneration report after 48 per cent of shareholders voted against it. This reflects growing discontent at the disparity between executive rewards, company performance and shareholder returns – Mr Sutherland received a £197,000 bonus for the 2019 financial year while the share price declined by a quarter during that time. Although a non-binding resolution, the group said it was “disappointed with the lower level of support” and would seek investors’ views when developing a new directors’ pay policy up for approval in 2020.
