Result of AGM

RNS Number : 2774V
Smith & Nephew Plc
14 April 2016
 

14 April 2016

Smith & Nephew plc

Smith & Nephew announces the results of the voting by poll on the resolutions put to its Annual General Meeting held at 2pm on 14 April 2016.

 

Resolution

For/Discretion

(Number of

votes)

 

Percentage For/Discretion

(%)

Against

(Number of

votes)

Total votes validly cast

Percentage  of relevant shares

in issue

(%)

Withheld

(Number of votes)

Ordinary resolutions 














1. To receive and adopt the audited accounts

631,479,299

99.99

70,136

631,549,435

70.51%

1,712,958








2. To approve the Directors' Remuneration Report (excluding Policy)

272,923,229

46.99

307,890,596

580,813,825

64.85%

52,448,566








3. To declare a final dividend

633,044,503

99.99

47,587

633,092,090

70.68%

170,303








4. To re-elect Vinita Bali

626,444,216

98.97

6,508,156

632,952,372

70.67%

309,145








5. To re-elect Ian Barlow

631,099,788

99.71

1,855,177

632,954,965

70.67%

307,427








6. To re-elect Olivier Bohuon

627,715,177

99.17

5,237,404

632,952,581

70.67%

309,811








7. To re-elect The Rt. Hon Baroness Virginia Bottomley of Nettlestone  DL

628,118,295

99.23

4,848,061

632,966,356

70.67%

296,037








8. To re-elect Julie Brown

626,917,710

99.05

6,022,024

632,939,734

70.67%

322,658








9. To re-elect Erik Engstrom

631,471,358

99.77

1,434,338

632,905,696

70.66%

356,697








10.To elect Robin Freestone

630,631,405

99.64

2,282,040

632,913,445

70.66%

348,948








11. To re-elect Michael Friedman

629,102,601

99.40

3,827,947

632,930,548

70.66%

331,843








12. To re-elect Brian Larcombe

611,956,966

96.81

20,153,487

632,110,453

70.57%

1,151,939








13. To re-elect Joseph Papa

613,133,671

97.54

15,450,120

628,583,791

70.18%

4,678,600








14. To re-elect Roberto Quarta

623,320,236

98.55

9,174,439

632,494,675

70.62%

767,718








15. To re-appoint KPMG LLP as the Auditor 

627,578,788

99.84

981,253

628,560,041

70.18%

4,702,351








16. To authorise the Directors to determine the remuneration of the Auditor

632,491,553

99.94

378,237

632,869,790

70.66%

392,603








17. To renew the Directors' authority to allot shares

622,400,709

98.34

10,534,835

632,935,544

70.67%

326,849








Special resolutions














18. To renew the Directors' authority for the disapplication of the pre-emption rights

573,758,792

93.69

38,660,179

612,418,971

68.37%

20,843,420








19. To renew the Directors' limited authority to make market purchases of the Company's own shares

628,940,015

99.39

3,851,185

632,791,200

70.65%

471,192








20. To authorise general meetings to be held on 14 clear days' notice

535,087,474

84.55

97,787,969

632,875,443

70.66%

386,949

 

The number of Ordinary Shares in issue on 12 April 2016 at 6pm (excluding shares held in Treasury) was 895,684,064. Shareholders are entitled to one vote per share.  A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes validly cast.

 

A copy of the Resolutions passed as Special Business at the Annual General Meeting is being submitted to the UK Listing Authority and will shortly be available for inspection at the National Storage Mechanism document viewing facility at: http://www.morningstar.co.uk/uk/nsm 

 

 

The Board notes that Resolution 2 to approve the remuneration report has received a significant number of votes cast against it (307,890,596 votes, 53.01% of votes validly cast). In addition, the holders of 52,448,566 shares withheld their votes.

 

Joseph Papa, the Chairman of the Remuneration Committee undertook an extensive engagement programme with shareholders ahead of the Annual General Meeting and has discussed this outcome and shareholder views with the Remuneration Committee and the Board over the past few days. The Board notes that shareholders concerns are focused mainly around the use of discretion exercised by the Remuneration Committee when determining the vesting of the proportion of the Performance Share Awards subject to the Total Shareholder Return (TSR) measure. We contacted the holders of around half our shares when we posted the Annual Report. Since then, around a quarter of our shareholders have contacted us to let us know their voting intentions and Mr Papa has discussed the process the Remuneration Committee went through in reaching its decision with most of these investors. Mr Papa also spoke to the Investment Association and Institutional Shareholder Services, organisations which analyse Company annual reports and make voting recommendations and seek views from their members. 

 

A significant number of shareholders were supportive of the Remuneration Committee's use of discretion, recognising that during the three year performance period, shareholders had enjoyed an excellent 80% absolute return, well ahead of the FTSE 100 at 20%, whilst the executives who had created that success would have received no reward in respect of TSR had the Remuneration Committee not exercised its discretion. This exercise of discretion resulted in a total payout of £2.1 million shared between around 60 senior executives. Nevertheless, a significant number of shareholders were opposed to the use of upwards discretion on principle, independent of their views of the performance of the Company.

 

We recognise that the use of discretion is a matter where there is considerable divergence of opinion. In spite of the voting outcome, the Remuneration Committee and indeed the Board unanimously believe that in these particular circumstances the Remuneration Committee made the right decision in aligning executive reward to the shareholder experience. It did not take the decision lightly and considered the position over a number of meetings, looking at multiple different scenarios. The use of discretion in 2016 is not intended to create a precedent for future years, but was used to address a particular anomaly arising as a result of losing three companies from the TSR peer group due to market consolidation during the performance period. Mr Papa had met with a number of major shareholders at the end of 2015 to discuss how this matter should be addressed. The overwhelming response from the shareholders he met was that substituting new companies for the companies which had fallen out of the peer group, in accordance with the Plan Rules which had been drafted to accommodate potential industry consolidation, would not be appropriate. Instead the feedback from some of these shareholders was that it would be better for the Remuneration Committee to exercise their discretion, which was exactly what they did.

 

Looking ahead, as mentioned in our 2015 Annual Report, the Remuneration Committee is undertaking a thorough review of remuneration arrangements during 2016, ahead of putting a revised Remuneration Policy to shareholder vote in 2017. Over the summer, they will consult with a broad range of shareholders to solicit their views on how best to align executive reward with shareholder interests.

 

We thank the shareholders, the Investment Association and Institutional Shareholder Services who have engaged with us to debate the issues which the Remuneration Committee has faced.

 

 

Susan Swabey

Company Secretary

Smith & Nephew plc

 

Tel:  +44 (0)20 7401 7646


This information is provided by RNS
The company news service from the London Stock Exchange
 
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