Savills shareholders have launched a revolt at its AGM, with nearly 20% voting against paying directors’ bonuses.
The company, which made pre-tax profits of £84.7m last year against the minimum requirement of £120m, paid chief executive Mark Ridley (pictured) a £350,000 bonus despite failing to hit the minimum profit target required to trigger an award, as well as £500,000 for meeting 90% of his separate key objectives during the pandemic. Its UK business was one of its bright spots, though, rebounding strongly during the post-lockdown boom.
In protest, almost a fifth of investors voted against the company’s remuneration report, while 6% abstained.
Savills said: “The board understands that shareholders’ primary concern was its decision to take into account a wider number of operational and strategic performance metrics than the profit targets set prior to the pandemic.
“The board applied discretion to specifically award 21% of the maximum potential profit related bonus element to the executive directors to recognise the significant operational and strategic progress in the year, reflected by the impressive market share gains. This decision resulted in total remuneration of the executive directors being reduced by 45% year-on-year.”
It said that some shareholders felt executive directors’ pension provision might not be aligned with the all-employee rate. “This is fully aligned with the rates available to colleagues with an equivalent level of service,” it added.
“The board is satisfied that its recommendation was made in the best interests of all stakeholders.”
Savills has promised to engage with its leading shareholders over the coming months and will publish an update on the meetings in six months.
This latest revolt is part of a post-Covid trend where shareholders have questioned directors’ awards related to pay and performance. Last month, nearly 40% of Foxtons shareholders voted against the company’s decision to pay bonuses to its executives after the company benefitted from £4.5 million in government Covid support. It had mooted £1 million shares and bonus payment for CEO Nic Budden.