Aggreko feels the pressure


Ashley Hamilton Claxton, Corporate Governance Manager

28 April 2017

Aggreko’s Remuneration Committee’s decision to award shares to executives without requiring them to meet strict performance conditions was met with such overwhelming disapproval by shareholders, that the company withdrew the resolutions before the AGM.
This is further evidence that investors are taking executive pay more seriously this year, and that boards are being forced to respond. While we are seeing incremental improvements, we are concerned that in most cases, companies are making the bare minimum changes to ensure their pay policies pass when put to a vote of shareholders this year. We have yet to see a fundamental shift in how companies award pay to their executives, and we will continue through our engagement with companies to ensure that matter is given serious attention. Our policy this year is to vote against the chair of the Remuneration Committee if we have voted against their pay plan two years in a row.

Aggreko’s Remuneration Committee’s decision to award shares to executives without requiring them to meet strict performance conditions was met with such overwhelming disapproval by shareholders, that the company withdrew the resolutions before the AGM.

This is further evidence that investors are taking executive pay more seriously this year, and that boards are being forced to respond. While we are seeing incremental improvements, we are concerned that in most cases, companies are making the bare minimum changes to ensure their pay policies pass when put to a vote of shareholders this year. We have yet to see a fundamental shift in how companies award pay to their executives, and we will continue through our engagement with companies to ensure that matter is given serious attention. Our policy this year is to vote against the chair of the Remuneration Committee if we have voted against their pay plan two years in a row.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.