Foxtons is to change the bonus scheme for its top team following a shareholder revolt at its most recent Annual General Meeting.
Over a fifth of shareholders rebelled and voted against the company’s remuneration committee report on May 20th.
This had recommended that if Foxtons achieves its ‘maximum performance’ this year CEO Nic Budden will be paid £1.74 million and CFO Mark Berry £779,000 through a mixture of a £300,000 base salary, a variable element and a long-term ‘bonus’.
Although the shareholder revolt was not enough to defeat the recommendations, it showed that shareholders were unhappy with such a generous reward scheme when the company is struggling.
Its latest quarterly results released two weeks ago showed revenue down 7% to £32.5 million for the three months to September, taking its total revenue for the year to £88.1 million, a reduction of 5% on the previous year.
“In our AGM Statement the Board acknowledged the concerns raised by shareholders regarding the FY2018 bonus outcomes and the impact this had on the level of support for the resolution approving our 2018 Annual Report on Remuneration,” a company statements says.
The committee has now suggested a new bonus scheme that will voted on at its next AGM in 2020.
These are likely to cut the bonuses paid to its top directors. The committee has looked at whether they should be remunerated if they achieve their personal targets but not their financial ones, and also make the bonus decision process more transparent.