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Agencies & People

Foxtons forced into humiliating U-turn over bonuses following revolt

Board has promised to revisit bonus packages after shareholders, representing 40% of votes, moved against remuneration report and Chairman.

Nigel Lewis

foxtons

Foxtons shareholders have in significant numbers voted against the company’s decision to pay bonuses to its executives after the company benefitted from £4.5 million in government Covid support.

At its annual general meeting today, nearly 40% of shareholders voted not to approve the Annual Statement from its remuneration committee chairman Alan Giles which had recommended the bonuses, which included a mooted £1 million shares and bonus payment for CEO Nic Budden.

nick budden foxtonsAs expected, a third of shareholders voted against another resolution calling for the re-election of Giles.

Although neither vote percentage prevented the resolutions from being carried, Foxtons board has taken noted.

It has said today that: “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.

“This is notwithstanding that discretion had been exercised to reduce bonuses that would otherwise have been earned against agreed performance conditions by 50%, a decision that was supported by the majority of voting shareholders.

“This resulted in a bonus for the CEO of £389,000, which was 33% lower than the previous year and 53% lower on a cash basis.

“The new 2020 remuneration policy was designed to better align executives reward with shareholders’ interests.

“However, in light of the votes against Resolutions 2 and 6 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 Committee will provide an update on this in the coming months.”

Industry comment

Investment firm Catalist, which recently took a 2% stake in Foxtons, says: “Today’s vote must serve as a wake-up call for the board. Shareholders are alert to the culture of entitlement that has squandered the company’s many advantages, and confirms the need for incentives linked to new, objective and ambitious targets.

“That so large a proportion of shareholders chose to vote against the renumeration package and the re-election of both the REM committee chair and CEO, can’t be ignored. The Board must act.

“Foxtons has a strong brand and great potential but years of underperformance can and must be reversed.

“We have identified to the board actionable steps that we believe would address this decline, and in doing so, the company’s leadership should rightly be rewarded, but for clear outperformance, not just riding the wave of a market recovery.

“We hope today’s vote will encourage the company to urgently engage with us and other shareholders to set Foxtons on a path to re-joining the FTSE250.”

Read more about Foxtons.

Read the full voting results.

April 22, 2021

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