Glanbia notes shareholder concerns on remuneration resolution

Just over 20% of shareholders at today’s Glanbia plc annual general meeting (AGM) voted against the company’s resolution to receive and consider the Remuneration Committee Report for 2018.

The resolution – which attracted some controversy in recent days regarding plans to increase the salaries of two of its highest ranking directors – nonetheless carried in the vote on the day.

Noting the result, Glanbia plc secretary Michael Horan said: “The company acknowledges the 20.7% vote against the remuneration report.

In accordance with the UK Corporate Governance Code, the company will engage with shareholders in order to understand reasons behind the proxy against Resolution 5 and will publish an update on the views received from shareholders and actions taken no later than October 24, 2019, in six months.

Following this, Glanbia chairman Martin Keane declared the resolution carried.

The resolution in question – Resolution 5 “To receive and consider the Remuneration Committee Report for the year ending December 29, 2018 (excluding the part containing the 2018-2020 Directors’ Remuneration Policy)” – was the only vote to encounter opposition of significance, with the remaining eight resolutions, broken into sub-votes, carrying with stronger support.

This proposal was previously questioned by investor advisory firms Glass Lewis and Institutional Shareholder Services (ISS), who regularly review policy changes and make recommendations.

Glass Lewis expressed reservations about the report, citing concerns around the “significant salary increases” awarded to group managing director Siobhán Talbot and group finance director Mark Garvey, to salaries worth €1,050,000 and €581,000 respectively.

Glanbia defended the proposal, pointing out the different methods used for calculating salary as leading to the contrasting views.

“Base executive salary is set by reference to the relevant market median of Europe and the US, based on independent evaluation against appropriate peer companies,” said a Glanbia representative in a statement to AgriLand.

It was noted that one of the advisory firms, ISS, had primarily looked at comparable salaries among its client companies in Ireland and Europe to determine if a change of remuneration for these executives was appropriate.

Glanbia, on the other hand, mainly looked at salaries in Ireland and the US when it was determining the change in pay. This, the group says, is because 80% of its earnings are in US dollars.

The firm also highlighted the importance of retaining senior leadership” at a “time of significant planned transition for the board”.

This point was referenced and underlined by a number of shareholder comments from the floor during questions and answers.