Last week saw significant numbers of shareholders flexing their muscles and reject executive pay agreements at Aviva, Trinity Mirror and the UK’s biggest car dealership Pendragon. So is shareholder activism the new political campaign and what’s it like to be a revolting shareholder? Melanie Smallman found out recently.
Back in the 1990s, I was one of many people who acquired shares when the Woolwich building society was demutualised. Disgusted at the very thought of becoming a shareholder, I put the paperwork away and forgot about it for 20 years. Then the credit crunch happened. Knowing I was right to vote against demutualization all those years ago gave me no comfort. But suddenly remembering that those Woolwich shares were now Barclays shares, therefore giving me a right to turn up at the Barclays AGM and express my disgust at their carry-on cheered me up no end.
My plan was to put a resolution to the AGM. So, in February 2011 I called the Barclays shareholders hotline. “I’d like to put a resolution to the AGM please,” “I don’t think that’s possible” came the reply, “ anyway, there’s no need to come to the AGM – the board’s recommendations will be supported automatically.” Hmm. In February 2012, I finally discovered that I needed 5% of the shareholding to support a resolution. Sadly, despite a Twitter appeal for more supporters, my 288 shares weren’t going to get me onto the agenda for this year. But it wasn’t over – I could still turn up and ask a question/stake the ground out for my attack in 2013.
So on an exceedingly wet Friday at the end of April, I turned up at the Royal Festival Hall, venue for the Barclays AGM, ready for some shareholder action. I had expected a room full of stuffy pinstripe suits, but the audience packing out the auditorium didn’t look that different to the crowd at Co-operative Party Conference – ordinary people, reflecting a range of ages, ethnicities and backgrounds who happily booed Chief Executive Bob Diamond, as if he was a pantomime baddie.
The questions came thick and fast for an hour and a half. And while I was very disappointed not to be called to ask mine (I was questioner 35 out of 28), most of the issues that mattered to me were raised by others: Why were bonuses being paid in a year when performance was down? Can we bring bankers executive pay more in line with normal professions? Why were there so few women in senior positions? Will Barclays pull out of food speculation? Sadly, the answers did little to reassure me that the Board had understood the shareholders anger. But if nothing else, Barclays Chief Executive Bob Diamond had to endure 90 mins of facetime with some of his paymasters and critics. While I’m still not convinced that he deserves his multi-million pound salary, he nonetheless handled the comments and questions with the kind of sincerity, patience and humility that many politicians would envy.
At the end of the meeting, I was one of the 27% of shareholders who voted against the executives’ obscene pay package. I was disappointed that we didn’t manage to overturn the board’s decision and make more of a fuss – indeed the biggest scrap of the day seemed to have been over the short supply of M&S lunch bags being handed out to departing shareholders. But reading about subsequent shareholder rebellions, and hearing commentators argue that it all started with the Barclays 27%, I’m beginning to wonder if my 288 shares are my latest political campaign tool rather than just poor compensation for the loss of a building society. I’m certainly planning to be back at for the 2013 AGM, hopefully this time asking a question if not moving a resolution. But I might even be ready to diversity my shareholder portfolio and become a shareholder activist in other ethically questionable companies, furthering the issues that mutuals and coops understand so well.
Author note: My 288 shares paid me a dividend of £16.70 this year, an amount which I have donated to the World Development Movement who (amongst other things) campaign to stop banks speculating on food prices. More information at www.wdm.org.uk
Melanie Smallman is National Secretary of SERA – the Labour Environment Campaign