Foxtons has announced that its remuneration policy for senior management is to stay unchanged - and it says a voting problem at the AGM stopped the policy receiving stronger support from shareholders.
The bonuses paid to Foxtons’ senior management has been under the spotlight in recent years.
At the 2019 Foxtons AGM there was a shareholder revolt over senior management remuneration.
At that time the agency’s 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 - by the time of the AGM Foxtons said Berry had decided to quit the company “by mutual agreement.”
Those bonuses came despite trading statements which some analysts regarded as disappointing for Foxtons.
By the time the 2020 AGM came, in May this year, the Coronavirus crisis was in full play.
Foxtons furloughed 750 staff by that time and had asked high paid staff earning over £40,000 to take a voluntary 20 per cent pay cut - although a fifth of the staff affected rejected the request. Foxtons also notified HMRC that it would be deferring some PAYE and NIC payments for at least one month.
Prior to the 2020 AGM Foxtons had conducted what it described as “an extensive shareholder consultation exercise with its largest shareholders and their representative bodies.”
Even so, the remuneration element of the 2020 AGM’s business received the backing of only 78.41 per cent of shareholders who voted - a far smaller proportion of support than most other business on the day.
At the time Foxtons described the 78.41 per cent as “satisfactory”.
Now the company has issued a new statement, some six months after this year’s AGM, saying: “Following the AGM it came to our attention that one of the company's largest shareholders had been unable to cast all their votes in favour of Resolution 2 [the remuneration issue] due to operational difficulties resulting from Covid-19. Had this shareholder been able to vote as intended, Resolution 2 would have obtained votes in favour of well over 80 per cent.”
The new statement continues: “In preparing the 2020 Directors' Remuneration Policy, the Remuneration Committee carried out an extensive shareholder consultation exercise with its largest shareholders and their representative bodies, the results of which fully are explained in the 2019 Annual Report.
“Following the consultation exercise some changes were made to the final Policy to reflect shareholder feedback and the Board has a clear understanding of the reasons why some shareholders were not supportive of the Policy.
“The Board believes the Policy approved at the 2020 AGM is the best structure to provide strong alignment with shareholders' interests in a highly cyclical business such as Foxtons.
“We therefore still consider this Policy to be in the best interests of the Company and the shareholders, and do not intend to propose further changes to the Policy at the 2021 AGM.”