John Menzies loses vote to cancel preference shares

Airport services and support firm John Menzies has been taken to task by shareholders after they voted down plans to cancel preference shares and nearly a fifth rebelled against pay proposals.

The group revealed that 63.6% of votes cast by its preference shareholders at a general meeting supported the resolution to cancel preference shares – with 36.4% of votes cast against it.

As it was a special resolution, John Menzies needed support from at least 75% of votes.

It comes after insurance giant Aviva was forced to u-turn on plans last year to cancel £450 million of preference shares after a backlash from investors and politicians.

Results of John Menzies’s meeting also revealed that 17% of wider investor votes were cast against its new pay plans for top bosses, although they received enough support to get the green light.

Just under 15% of votes were made against its plans for a one-off share award for its executive chairman Philipp Joeinig, who was appointed in July.

John Menzies had already been sent back to the drawing board on the proposals after 23% of investors voted against them following the AGM in May.

The group said it was “disappointed” in the preference share vote, which means the current plans will have to be scrapped.

It pledged to undertake a “detailed review of any feedback received on this resolution to ensure it fully understands the reasons behind the voting result”.

It added: “The board takes seriously its responsibilities to represent the interests of shareholders and to uphold the highest standards of corporate governance and is open to constructive dialogue with shareholders and shareholder bodies.

“Accordingly, it will continue to engage with preference shareholders over the coming months in respect of the votes received against this resolution.”

The group has 1.4 million preference shares in issue, against 84.4 million ordinary shares.

It had previously said it no longer considered it appropriate to maintain them, as they carry rights which require it to seek consent from their holders in certain circumstances, limiting the company’s flexibility in future activity.

Its preference shares also carry a 9% dividend payout rate, which it has said is “significantly in excess of the interest currently paid by the company on its borrowings”.

The vote follows a tough past year for John Menzies, which warned over profits in July amid poor trading across the business, driven by fewer customers sending cargo and a cut in flights.

John Menzies operates many of the behind-the-scenes parts of airports, including air-side assistance and the refuelling of planes.

The group, which traces its roots back to a bookshop founded in 1833, in May appointed Swiss private equity fund manager Christian Kappelhoff-Wulff to its board and formed two new committees to consider strategic and structural options.