Merseyside opposed management at 15% of UK AGMs

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  • Merseyside opposed management at 15% of UK AGMs

UK - The £3.7bn (€4.1bn) Merseyside Pension Scheme has revealed it voted against company management in 15% of UK company meetings last year, as corporate behaviour was "judged to be below best practice guidelines".

Details of the pension fund's voting activity in 2008 showed the scheme voted on all of its internally-managed UK and European equity holdings, equivalent to 52 meetings between July and December 2008, in accordance with recommendations from its consultant PIRC.

Of all the resolutions voted on in the UK, 15% were against the company management, either through an opposing vote or abstention, and of which 41% related to directors' remuneration and emoluments, while 20% of resolutions considered to be "below the best practice guidelines" concerned the reappointment of auditors, and 24% related to the election of directors.

Merseyside voted at 67 meetings in the third quarter of 2008, comprising 26 in the UK, four in Europe, one in Japan and 37 in the rest of the world, and of these it opposed or abstained on one or more resolutions in 53 meetings.

The scheme said during this period it also voted in favour of a shareholder resolution relating to corporate social responsibility (CSR) which required Tesco to adopt a higher minimum welfare standard for chickens purchased by the company, which was not passed but received almost 20% of shareholder support.

In addition, Merseyside "joined with many others in the investment community" to oppose the proposal at the Marks & Spencer meeting to allow Sir Stuart Rose to combine the roles of chairman and chief executive, as "this was a clear contravention of a long established principle of UK corporate governance" adding the level of "shareholder disquiet" displayed means the issue will be addressed in the 2009 annual general meeting (AGM).

Although March and July are when the majority of company meetings take place, in the fourth quarter of 2008 Merseyside participated in 75 meetings, of which 16 were UK companies, 6 in Europe, 2 in Japan while the majority, 51, related to companies in the rest of the world.

Over this period the pension fund voted against or abstained on resolutions at 53 meetings, including certain resolutions at Diageo meeting over concerns regarding the level of political donations in the US, and "excessive" reward packages to executives.

The scheme also voted to support emergency re-financing proposals from a number of UK banks, including Lloyds TSB and HBOS, although it admitted its support for resolutions at the Barclays meeting "was given reluctantly because the fund felt that the risk of further destabilising Barclays was too severe, despite the dilution of the existing shareholders' interest".

However it acknowledged that in this case, and following shareholder concerns, the Barclays board had announced the entire board would be up for re-election at the 2009 AGM. 

Meanwhile, within its top 10 UK equity holdings Merseyside revealed in 2008 it opposed the approval of the remuneration report for a number of companies, including BP, Vodafone, HSBC, Royal Dutch Shell, GlaxoSmithKline, BG Group, Anglo American and Tesco.

It also abstained from the appointment of auditors in six companies, and the election or re-election of directors in four cases, while it opposed the re-election of two non-executive directors of Tesco.

Merseyside had been under fire over the last 18 months from local councillors and trade union representatives for its decision to invest in stocks some members considered were not appriate for pension fund investments. (See earlier IPE story: Legal threat to pensions arms trade decision)

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email

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