Shareholder revolt at Foxtons rumbles on as firm seeks to appease City

Company has promised to review its bonus scheme after a significant number of shareholders did not back its remuneration committee report.

foxtons

Foxtons has this morning promised to review its bonus scheme for senior directors following this April’s shareholder revolt at its AGM.

The update is designed to appease the significant number of larger shareholders who were unhappy that the company attempted to pay its senior directors significant bonuses including £1 million for CEO Nic Budden.

But despite bonuses being reduced by 50% in line with company policy, only 60% of votes supported the bonus scheme, with just 67% backing the re-appointment of Alan Giles, its remuneration committee chairman.

The revolt centred on shareholder worries that the company, which received some £4.5 million in government support during the pandemic, would look greedy if its senior directors were given significant bonuses this year.

Foxtons now has an uphill battle on its hands to soothe shareholder concerns but it is standing its ground to a degree – saying that although its remuneration committee ‘acknowledges’ concerns around the bonus scheme, it believes the original decisions were ‘appropriate and in the long term interests of stakeholders’.

Review

“While the Board believes the Policy approved at the 2020 AGM is the best structure to drive long-term shareholder value and stakeholder interests in a highly cyclical business such as Foxtons, we will review the Policy during the year ahead, in consultation with shareholders, to ensure that it continues to be in the best interests of the Company and its shareholders in the longer term,” a company statement says.

Earlier this year investment firm Catalist, which recently took a 2.3% stake in the agency, said: “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”.

Catalist has been kinder about Foxtons’ new chairman. Spokesman Josh Ponniah said: “The board has responded to issues raised by shareholders. Nigel brings the specific industry expertise and turnaround experience that Catalist believes is necessary to reverse the decline in performance over the past 5 years.”


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