Shareholders Reject Remuneration Reports
Active Shareholder recently voted against both the Policy and Implementation of the Remuneration Reports at Nampak and Reunert Annual General Meetings. Many other shareholders agreed with us and both these companies now need to engage with their shareholders in determining acceptable remuneration policies and practices.
At their recent AGM’s less than 63% of shareholders voted for both the Policy and Implementation of the Nampak Remuneration Report and less than 58% voted for the Policy and less than 66% voted for the Implementation of the Reunert Remuneration Report.
South Africa is an extremely unequal society and there is growing resistance to the high levels of executive remuneration. Active Shareholder believes all companies should disclose the wage gap in their companies as part of trying to address the growing inequality.
In terms of the King code on corporate governance, companies are required to divide their vote on the remuneration report into a vote on the Remuneration Policy and a separate vote on Remuneration Implementation. These votes are non-binding votes but companies are required to respond where less than 75% of shareholders vote for the resolutions.
Active Shareholder is concerned that we have noted in some remuneration reports that the Remuneration Committee in some instances believe that they have the support of their shareholders despite the fact that a significant minority are voting against their Remuneration Policy and Implementation.
We will continue to carefully monitor remuneration and believe shareholders should start expressing their displeasure by voting against the appointment of directors who serve on the remuneration committee where the Remuneration Report is not acceptable.