Redrow investors protest against pay plans and chairman’s appointment
Housebuilder Redrow has been dealt a blow after nearly a third of shareholders protested against pay plans for top bosses and the appointment of its executive chairman.
It said 30.4% of investor votes were cast against its remuneration report at its annual general meeting (AGM), while 31.4% were made against the re-appointment of executive chairman John Tutte.
Both resolutions were passed, despite the protest.
It comes amid anger at the group’s moves to lower targets under its long-term incentive plan – essentially seen as making it easier for bosses to earn bonuses.
There has also been investor unrest that former boss and founder Steve Morgan is still entitled to long-term bonus payouts, while the group defied corporate governance guidelines by appointing chief executive Mr Tutte to the role of executive chairman in March.
It comes after influential investor advisory groups Glass Lewis and ISS recommended shareholders vote against the firm’s long-term bonus scheme ahead of the AGM.
Redrow defended its recent decisions, but said it would keep management arrangements under review and continue engaging with shareholders on both issues.
On the bonus plans, it said: “The board is satisfied that the targets are appropriate taking into account the challenges the business faces, including from the planned changes to the Help to Buy scheme in April 2021, and strike the right balance between ambition and deliverability.”
It added: “The board will review future LTIP (long-term incentive plan) targets, measures and rules as part of the forthcoming review of the company’s remuneration policy that will be subject to shareholder approval in 2020.”
It insisted Mr Tutte’s appointment as executive chairman was “in the best interests” of the company, allowing continuity following the retirement of founder Mr Morgan.
But Redrow assured Mr Tutte’s appointment would also allow for a more conventional board structure in the future, following Mr Morgan’s departure.
There have been concerns among shareholders that Mr Tutte’s promotion to the helm means he is he is not sufficiently independent to oversee governance of the firm.
Redrow said it would keep the “current arrangements under review and will continue to discuss them with shareholders”.