The Annual General Meeting of Foxtons shareholders in London has seen a dramatic rebellion against bonuses for senior management.
There were 14 resolutions put to shareholders and 13 of them were passed with support from between 94.76 per cent and 100 per cent.
However, resolution 2 - “to approve the annual statement from the remuneration chairman and the remuneration report” - was the subject of significant opposition 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 rebellion came just hours after Foxtons revealed that Berry was in fact quitting this summer “by mutual agreement.”
He will step down as an executive director and CFO on July 31 and will quit the board next month. The firm says he “will receive a payment of three months' salary as a notice period payment and in lieu of any bonus earned for full year 2019. The share options awarded to [him] in 2017 will be pro-rated for time, subject to existing performance tests.”
In his place comes Richard Harris who joins the company next month. He was previously group financial controller at Laird plc and prior to that spent over 11 years at Marks and Spencer plc, in a number of senior finance roles.
Yesterday Foxtons issued a downbeat trading statement admitting sales volumes hit “record lows” in the first quarter of 2019. The company blamed Brexit but some shareholders are believed to have been concerned at the performance and quality of senior management - hence the concern over ‘fat cat’ bonuses.
Five years ago Foxtons’ share price was riding high at almost 330p; yesterday it closed down another 4.7 per cent at just 57.2p.
Last evening Foxtons’ management released a statement to shareholders - its second in 12 hours - saying: “The Board of Foxtons Group plc notes that while a significant majority of Shareholders that voted at today's Annual General Meeting supported Resolution 2 to approve the Directors' Remuneration Report, a notable number of Shareholders opposed this resolution. All other resolutions received substantial support.
"The Board acknowledges the concerns raised by Shareholders in particular regarding the FY2018 bonus outcomes. As stated in our Annual Report, the Committee will be conducting a detailed review of the Remuneration Policy later this year, which will be submitted for Shareholders' approval at the 2020 AGM.
"As part of this review, we will take into account the changes in the UK Corporate Governance Code along with shareholder and UK remuneration governance guidelines. In line with our commitment to maintaining an open and transparent dialogue with Shareholders, we will be consulting with all major Shareholders in the second half of 2019 to gain their input in this review.
"We will also consult further on the concerns raised on this resolution and in accordance with the UK Corporate Governance Code, we will publish an update on that engagement within six months of the AGM."
Stepping into the fire at Foxtons will be Alan Giles. He is currently a non-executive director and a former independent non-exec on the board of the Competitions and Markets Authority but it was announced yesterday that he would be joining Foxtons’ remuneration, audit and nomination committees.
In his acceptance statement Giles described Foxtons as “a well differentiated brand with a strong market position.”