Controversial London agency Foxtons is to review its policy on top management bonuses.
This follows a shareholder revolt at the agency's AGM and widespread criticism of the agency's failure to return furlough money to the government despite the company benefiting from a strong housing market.
The controversy centres on a bonus issued to Foxtons chief executive Nic Budden while at the same time the company took millions of pounds in taxpayers’ money in the form of business rate exemptions and furlough funding; unlike several other agencies, it has shown no sign of returning the public money.
Whereas most motions at the AGM back in April received 95 to 99.9 per cent backing from shareholders, there were a small number of obvious exceptions. The remuneration proposal - containing Budden’s bonus - won only 60.63 per cent support. And the re-appointment of Budden himself as a director won only 82.83 per cent backing. Meanwhile non-exec director Alan Giles, who heads Foxtons remuneration committee, won only 67.41 per cent backing from shareholders for his re-election.
A statement to shareholders this morning says: “At the Annual General Meeting of Foxtons Group plc held on 22 April 2021, Resolution 2, an advisory vote on the implementation of the Company's 2020 Remuneration Policy (the "Policy"), and Resolution 6, the reappointment of Alan Giles, the Chairman of the Remuneration Committee, were approved by 60.63% and 67.41% of shareholders, respectively.
“The Committee has consulted with its larger shareholders to understand their views. The performance of the business in 2020 met the conditions set out in the remuneration framework for the payment of bonuses but, considering the circumstances, the Committee exercised its discretion by reducing this award by 50%.
“Despite the discretion, it was clear that a significant proportion of shareholders did not agree with the decision to pay bonuses to Executive Directors under the Bonus Banking Plan, because the Company had benefited from Government support.
“The Policy, which itself was approved by 79% of voting shareholders at the 2020 AGM, was designed to better align executives reward with shareholders' interests. The Remuneration Committee acknowledges shareholders' concerns around the implementation of the policy in 2020, however believes the decisions were appropriate and in the long term interests of stakeholders.
“While the Board believes the Policy approved at the 2020 AGM is the best structure to drive long-term shareholder value and stakeholder interests in a highly cyclical business such as Foxtons, we will review the Policy during the year ahead, in consultation with shareholders, to ensure that it continues to be in the best interests of the Company and its shareholders in the longer term.”