Learning Curve: AGMS

As the row over CEO pay escalates, AGMs have become the battleground for shareholders to voice their discontent.

by
Last Updated: 09 Oct 2013

What are they?

The annual general meeting - the clue is in the name. This is your once-a-year chance, even as a small shareholder, to question the company's leadership in public and vote on the retention of board directors. You may also get 'a say on pay', expressing a view on the remuneration of top executives. For as long as most can remember, AGMs have been pretty placid affairs in the great City tradition: a nod here, a raised eyebrow there, but no drama. You turned up, got your free sandwiches and went home again. But change is afoot.

Where did they come from?

In the pre-corporate governance industry era, when a chap could trust another chap to run a company in the right way, the AGM was a mere formality, if it happened at all. Family and private businesses may not even have bothered. There would have been a nominal signing off of accounts and then a bloody good lunch. As the last century wore on and companies realised that shareholders deserved a modicum of attention, the AGM became a bit more formal and substantial. But it was still a relatively empty event until the recent wave of shareholder activism, inspired by the great financial crisis.

Where are they going?

The shareholders are revolting. Well, some of them, anyway. As Barclays chairman Marcus Agius could confirm, the quiet men (and women) from the suburbs have found their voice. As one of them said at the April AGM, referring to top pay at Barclays: 'You're doing a lot of damage to the reputation of the bank, the reputation of the City and the reputation of capitalism.' But what about the big boys, the institutional shareholders? Will they start to speak up publicly too? Not sure that board directors have too much to worry about there.

Gradient: a steadyish climb - but to where?

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