The Future Is Revolting! Barclays PLC, Experian plc And Glencore Plc Shareholders Forge An Era Of Predomination

Barclays PLC (LON:BARC), Experian plc (LON:EXPN) and Glencore Plc (LON:GLEN) have seen shareholder revolts directed at other issues besides pay.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Increasing numbers of CEOs are feeling the wrath of shareholders as investors realise that they can influence executive salaries, their policies or their tenures.

Previously, the shareholder’s choice of contention was a vote through the market by offloading holdings. Despite some corporate governance reform guidance throughout the last decade, it took the government’s recent regulation to bring the biggest change since the original legislation over a decade ago…

No longer can shareholders be considered a necessary nuisance at the AGM to be accommodated once a year with glossy prospectus and the ambiguous chairman’s speech; increasingly, they are exercising their rights and demanding more governance. 

This shifting relationship between shareholders and their companies will continue as the EU is also planning legislation to make all companies report non-financial data, and allow shareholders to hold businesses to account over a broader range of issues.

The centre of shareholder activism seems likely to stay in the UK because of the high number of majority institutional investor ownership in its companies.

It’s Not Just Pay

An increasing number of revolts have been directed at other issues besides over-inflated pay packets — factors such as dissatisfaction around company performance and the leadership of the business are gaining attention.

Mining giant Glencore (LSE: GLEN) saw 10% of its shareholders reject the appointment of ex-BP CEO Tony Hayward as chairman after criticism of the firm’s failure to appoint any female board members. It is producing a current dividend yield for shareholders of 2.7% and is forecast to deliver a yield of 2.9% for 2014 and 3.2% for 2015.

Sir John Peace is facing a revolt at the three companies where he is chairman. Remuneration is the issue at Burberry and Standard Chartered, but investors at Experian (LSE: EXPN) failed to support the election of his successor, Don Robert, after the intervention of the Institute of Directors warned the appointment breached City codes of independence for the chairman role. Experian delivers a dividend yield of 2.13% to shareholders and is expected to increase this to 2.3% and 2.5% for the years 2014/15.

Most institutional investors have previously been reluctant to criticise board policy publicly and instead preferred to work behind the scenes with firms; however, Barclays (LSE: BARC) (NYSE: BCS.US) suffered a scathing slap-down from major shareholder Standard Life, as it publically voted against the bank’s remuneration report, saying the 10% hike in bonuses cannot be defended.

Alison Kennedy, governance & stewardship director at Standard Life Investments, said: “We are unconvinced that the amount of the 2013 bonus pool was in the best interests of shareholders, particularly when we consider how the bank’s profits are divided amongst employees, shareholders and ongoing investment in the business.”

Dividends from Barclays were 6.5p for 2013 and are expected to grow to 7.73p for 2014 and 10.68p for 2015, giving a yield of 3.7% and 5% respectively.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Lisa Walls-Hester has no position in any shares mentioned. The Motley Fool has no position in any of the shares mentioned.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »