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UPDATE: Pay comes under spotlight at BAE, Indivior and Rio Tinto AGMs

Thu, 6th May 2021 17:50

(Alliance News) - Shareholders voiced their discontent with executive pay on Thursday, with BAE Systems PLC, Indivior PLC and Rio Tinto PLC all seeing varying sizes of AGM rebellion.

At BAE's annual general meeting, resolution two, which concerned the directors' remuneration report, was passed by 76.59% of votes cast.

The company noted the vote outcome, and said it was "very appreciative of the support the resolution received in a challenging period"

"The importance of retaining the services of a first class chief executive on competitive terms by a one-off remuneration adjustment was taken in the interests of all stakeholders, and was explained in detail in our annual report and through personal engagement with shareholders accounting for nearly 70% of the company's share capital. Our depth of engagement was positively received as was the exceptional level of transparency in both our dialogue and the annual report," said BAE.

It "may not be possible to please all our stakeholders all of the time", but the defence firm said it will continue to engage with shareholders.

Indivior also saw a sizeable minority vote against approval of the directors' remuneration report, with 38.3% of votes cast at the AGM against and just under 62% in favour. The pharmaceutical firm was "disappointed" by the outcome of the vote.

"In the run-up to the AGM we engaged with a number of shareholders to understand their concerns, which we understand related to the termination arrangements for the former chief executive officer, Shaun Thaxter. The remuneration committee determined, based on Thaxter's leadership that produced years of positive operational performance, and the absence of any findings of personal wrongdoing or malfeasance, to allow Thaxter to retain his outstanding LTIP awards," said Indivior.

Indivior also noted that resolution 14, which concerned the re-election of Daniel Phelan as a director, was passed with 78.5% shareholder support. The company will continue to engage with "our largest shareholders on governance and remuneration matters", it said.

Despite some minority rebellions, all resolutions at both BAE and Indivior's AGMs - including those on remuneration - were passed.

However, miner Rio Tinto earlier in the day saw shareholders actually vote against advisory resolutions on executive remuneration, admitting that pay is a contentious issue after the company destroyed the Juukan Gorge Aboriginal heritage site in Australia.

Holders of 61% of shares voted against the two resolutions, on the directors' remuneration report and the implementation report, excluding abstentions and withheld votes.

"The board acknowledges that the executive pay outcomes in relation to the tragic events at Juukan Gorge are sensitive and contentious issues," the company said. It added that it will engage further with shareholders, before outlining any additional measures in response to the feedback at next year's annual general meeting.

Outcry and regulatory scrutiny followed the company after it blew up a 46,000-year-old Aboriginal heritage site to expand the Pilbara iron ore mine in Western Australia.

In May of last year, Rio Tinto had blasted rock shelters in the Juukan Gorge in Western Australia's remote Pilbara region, destroying one of the earliest known sites occupied by Australia's indigenous people, in order to expand its iron ore mine.

Shares in Indivior closed up 1.7% at 155.86 pence in London on Thursday, while BAE shares rose 0.9% to 504.41p. Rio Tinto shares gained 1.1% to 6,477.00p.

By Ivan Edwards; ivanedwards@alliancenews.com; Updated by Lucy Heming; lucyheming@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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