AGM statement – 29 January 2021
The Board notes that while Resolution 2 to approve the Directors' Remuneration Report was passed, a significant minority of shareholders voting (23.7%), chose not to support this resolution.
The Remuneration Committee gave careful consideration to executive remuneration during 2021 and consulted extensively with the Company's largest shareholders and the major proxy voting agencies. The views of all our shareholders are important to us and we will consult further with those shareholders who voted against this resolution to better understand their specific concerns.
The Company will provide an update within six months as required by the Corporate Governance Code 2018.
Follow up statement
At the 2021 Annual General Meeting (“AGM”), resolution 2 to approve the Directors’ Remuneration Report for the year ended 30 September 2020 received votes against from 23.7% of the votes cast.
As a result, the Company sought to engage with all those major shareholders who voted against the resolution to better understand their reasons for doing so. Amongst the shareholders who engaged with us it appears there were two main reasons which explained their decisions to vote against. The first was due to the salary increases applied to the executive directors for FY2021 and the second was in relation to the timing of the executive directors’ pension reductions, whose contribution rates are reducing to the workforce level from 1 October 2023 and not from 1 January 2023.
The Committee understands the general sentiment towards increases to senior executives’ salaries and takes comfort that the revised salaries are not excessive relative to companies of a similar size to Avon Rubber. However, the Committee will consider the feedback received when reviewing salaries over the life of the current policy.
In addition, the Committee is supportive generally of the drive to align executive directors’ pension contributions with those of the workforce, as evidenced by the commitment to doing so within the new remuneration policy. The timescale within which the transition to the workforce level will take place was considered carefully in the round alongside the other various changes to the policy we were seeking approval for. The Committee concluded that achieving alignment over the life of the policy was the fairest approach and, taking account of all the impact on all stakeholders, struck an appropriate balance.
The Remuneration Committee would like to thank shareholders that took part in the engagement process and values the feedback and insights it has gained. It remains committed to engaging proactively with shareholders and advisory bodies on remuneration matters. A final update on this matter will be included in the 2021 Annual Report.