Troubled London estate agency Foxtons says it has rewritten its remuneration policy for its senior management following a shareholder revolt at its AGM.
Back in May the annual statement regarding remuneration of senior management provoked a furious debate at the AGM and it passed with only 78.37 per cent of shareholders backing it.
Chief executive Nick Budden and chief finance officer Mark Berry were awarded £389,000 in bonuses for 2018, up from £371,000 the previous year; the AGM rebellion came just hours after Foxtons revealed that Berry was in fact quitting “by mutual agreement.”
Afterwards, Foxtons pledged to conduct a review, and now that appears to have happened - although, so far at least, the agency is not revealing details.
A statement to its shareholders late yesterday afternoon said:
“As committed to in the AGM Statement, the [remuneration] Committee has now conducted a detailed review of the current Remuneration Policy, resulting in a new proposed Remuneration Policy to be submitted for Shareholders' approval at the 2020 AGM.
“As part of this review, the Committee considered the changes in the UK Corporate Governance Code along with shareholder and UK remuneration governance guidelines.
“In addition, the Committee looked at the particular concerns raised by Shareholders in relation to the FY2018 bonus outcomes, namely:
- The payment of bonus on personal and strategic objectives despite not achieving the financial targets;
- The weighting of the bonus to personal and strategic objectives;
- The selection of some of the personal and strategic objectives and their level of granularity;
- Insufficient disclosure of the personal and strategic objectives and their basis of satisfaction.
“The Committee has addressed all the above issues in the new proposed Remuneration Policy. In line with our commitment to maintaining an open and transparent dialogue with Shareholders, we will shortly be consulting with all major Shareholders to gain their input on the new proposed Remuneration Policy before its finalisation.”
Foxtons’ latest trading statement, issued just over two weeks ago, showed continuing troubles for the agency spreading from the sales side to lettings as well.
Sales revenue in the third quarter of the year dropped another 15 per cent thanks to “ongoing political uncertainty continued to weigh on volumes and prices in the London residential sales market. A combination of lower volumes, falling prices and fewer high value sales meant that sales revenue for the quarter was down 15 per cent to £8.4m (Q3 2018: £9.9m).”
On the lettings side of the business - until now growing, in some form of balance to the long-term deterioration in the company’s sales performance - the statement revealed a four per cent drop in revenue.
The statement in late October said: “Improvements to our lettings offer and our decision to not increase fees to landlords following the tenant fee ban has enabled us to grow market share, improve revenue from landlords and increase the penetration of our property management services. Notwithstanding this pleasing progress, as expected the tenant fee ban which came into force on 1 June 2019, resulted in lower revenue for Q3, down four per cent to £22.1m (Q3 2018: £23.1m).”