Foxtons has been hit by a pay revolt after 44% of its shareholders failed to back the award of a near-£1m bonus to its chief executive while refusing to pay back millions of pounds in taxpayer-funded government support during the coronavirus.
The London estate agent, which has received almost £7m in government furlough money for staff and business rates relief, said Nic Budden would still receive the payout despite the significant scale of the investor rebellion at its annual general meeting.
Just under 40% of Foxtons shareholders voted against the company’s remuneration report, while a further 5% abstained, which is often viewed as a protest vote. Almost 37% of voters also failed to support the re-election of the director Alan Giles, the chairman of the remuneration committee, while 17% voted against Budden’s reappointment.
“Today’s vote must serve as a wake-up call for the board,” said Catalist Partners, an activist investor that holds a 2% stake in Foxtons. “The company’s leadership should rightly be rewarded, but for clear outperformance, not just riding the wave of a market recovery. The board must act.”
Foxtons, which pointed out that four-fifths of shareholders voted for the plan to be implemented at last year’s meeting, has the right to ignore the non-binding vote despite the negative publicity generated by the revolt.
“It is clear that a significant proportion of shareholders did not agree with the decision to pay bonuses to executives under the bonus banking plan, on the basis that the company had benefited from government support,” Foxtons said. “The new 2020 remuneration policy was designed to better align executives reward with shareholders’ interests.”
The company defended the payout, saying that Budden’s £389,000 bonus, part of a £1.6m total remuneration package, was a third lower than in 2019. He also received shares worth £569,000 under a long-term incentive scheme. In 2019, his total remuneration was £1.25m.
“However in light of the votes against [the resolutions] the remuneration committee will review the remuneration policy and its implementation in consultation with shareholders to ensure executive remuneration drives long-term shareholder value and stakeholder interests,” the company sad. “The committee will provide an update on this in the coming months.”