Anglo American avoided a second public relations disaster as 93% of its shareholders voted in favour of the group’s amended remuneration policy at Tuesday’s annual general meeting.
The most contentious resolution at this year’s AGM related to the re-election of auditors, with just more than 16% of shareholders voting against the re-election of Deloitte. This represents a substantial increase on the 4% vote against their reappointment at last year’s AGM.
Much of the increase could be accounted for by the Public Investment Corporation (PIC), which has taken a stand on the rotation of audit firms since the Independent Regulatory Board for Auditors launched its proposed policy on the matter towards the end of 2016. The PIC holds about 10% of Anglo.
The auditor vote might have caused some discomfort among board members, but it was more than compensated for by the huge swing in support for the remuneration policy. At 2016’s AGM, a record 41% of shareholders voted against the policy in what was interpreted by some as the beginning of a global move against executive excess.
Policy Overhaul
Shareholders were particularly angry about the effect of the valuable long-term incentive plan. Thanks to a recovery in the Anglo share price, the long-term incentive plan generated multi-million-pound awards for CEO Mark Cutifani at a time when the company reported dismal earnings and the share price lost 75% of its value.
After the embarrassment of 2016’s AGM, Cutifani promised to listen to shareholders’ concerns and the board undertook to overhaul the remuneration policy.
The revised policy, which won the backing of 93% of shareholders on Tuesday, reduces the scope for executives to score huge packages on the back of surging commodity prices or favourable exchange rate movements.
Although the voting results indicated shareholders were generally happier this year, those who attended the meeting in London witnessed a number of stakeholders from across the globe describing a less happy picture. Shareholder activist Theo Botha attended in the hope of finding out why the group did not provide more information on fatalities, which after years of decline had increased in 2016.
Silicosis Fund
Members of the National Union of Mineworkers asked for details about possible payouts from the silicosis fund.
Community representatives from South America and workers from Australia also attended, raising concerns about the environment and mine closures.
Departing chairman Sir John Parker addressed the group’s apparent deviation from the disposal strategy set out in early 2016. “Given the subsequent change in the pricing environment later in 2016 and the improvement in operation performance, the overriding imperative to sell assets to reduce debt was removed,” he said.
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