Persimmon boss Jeff Fairburn to leave

[Dod101]

It seems that many companies' Articles of Association require a shareholder vote to be by a poll, that is it will include proxy votes as well as those shareholders present, and will count the number of shares held by each voter whether by proxy or otherwise. A show of hands at a shareholder meeting on the other hand, is much less 'accurate' in that only the number of shareholders present and entitled to vote can do so but they are not voting their shares, simply ' one vote per shareholder' That can be seen as less democratic as it puts much more power in the hands of small shareholders. Naturally organisations representing private shareholders, such as ShareSoc and UKSA like voting by a show of hands.

If you attend an AGM you will often be given a voting gadget after you have registered. This is personal to you and as you vote by pressing the appropriate button, it will record the number of shares being voted. Alongside this is a large screen which will show the number of votes cast for, against or withheld and usually the percentages in each category. That is a poll vote and is of course far removed from the traditional show of hands.

Does that help?

Dod

[Bouleversee]

Dod - Interesting info. about the gadget etc. but what you said doesn't seem to tally with what actually happened at the PSN mtg. The link Geng provided re results says that the LTIP resolution was passed on a show of hands and then that 185,254,097 voted in favour but that must have been shares not people attending so must have included shares or shareholders voting by proxy. Perhaps I am just being dim. Anyway, I must press on with urgent matters.

At all events, these LTIP bonuses have got completely out of hand and there should always be a cap. If I had been in Fairbairn's shoes I should have been covered in embarrassment and falling over myself to decline some of it.

[Gengulphus]

Thanks again, but you didn't really answer my question as to whether I had understood it correctly or not?

Sorry. I've only been to a few shareholder meetings, but the impression I got wasn't that anything was clearly counted on a show of hands - it was just "Those for? ... Those against? ..." and then indicating that the resolution was clearly passed (which it was in each case). If a shareholder had wanted, they could have piped up and asked for a poll, and I suspect that if the show of hands looked at all close, the chairman would have said a poll was needed. I don't know really know what would have happened next in either of those cases.

Certainly I couldn't see that any real attempt was made to accurately count the hands. Basically, if a resolution is contentious enough to require an accurate count at all, I would expect it to go to a poll, and on that, it's definitely shares (*) that are counted, not shareholders. (For company meetings, that is - as we discussed a few weeks ago for Unilever, court meetings are a different matter.)

One other thing I should say is that my limited experience of shareholder meetings is all of pretty small ones - I think the range 5-50 shareholders attending roughly covers it. I've no experience of big ones that require the company to hire a large hall and hundreds or thousands of shareholders attending, but clearly the job of chairing such a meeting and getting through the resolutions reasonably quickly must be rather different for them!

(*) Or to be really pernickety, it's voting rights that are counted - some companies do have different classes of share with different numbers of voting rights per share. It's rare among listed big companies - I believe listing rules fairly strongly discourage it, though I've never checked that properly - but not totally unheard of. E.g. Schroders has two classes of share: SDR with 1 voting right per share, and SDRC with 0 voting rights per share. It's much more common among small private companies, but that generally needn't concern HYPers!

Gengulphus

[Gengulphus]

Dod - Interesting info. about the gadget etc. but what you said doesn't seem to tally with what actually happened at the PSN mtg. The link Geng provided re results says that the LTIP resolution was passed on a show of hands and then that 185,254,097 voted in favour but that must have been shares not people attending so must have included shares or shareholders voting by proxy.

Sorry - the link said accurately what the 185,254,097 figure was, namely the number of shareholders who voted for the resolution by proxy before the meeting, but I somewhat mis-summarised it as just the number voting in favour. I.e. it was the number of shares voted by proxy rather than just including them.

So basically, the FTIP was passed on a show of hands in 2012 and no poll was taken, so the proxy votes didn't ever actually influence the decision, which is why the paragraph about them starts "For information, ...". But they do tell one that the LTIP would have passed even if a poll had been taken - i.e. the show of hands result was accurate enough on that occasion.

It does also indicate the Persimmon clearly wasn't one of the many companies Dod101 described whose "Articles of Association require a shareholder vote to be by a poll", and what he says about the devices probably indicates that his experience of shareholder meetings is generally of much bigger ones than mine.

Gengulphus

[Dod101]

I was thinking of the megacaps, HSBC and Unilever but also the very much smaller Alliance Trust. I have been to all three AGMs this year and they all employ the electronic voting gadget so as to make a poll vote so much easier.

Dod

[Bouleversee]

At the risk of getting my knuckles rapped, this link is to Jeff Fairburn's settlement agreement. Isn't he wonderful?

https://www.persimmonhomes.com/corporat ... lement.pdf

[Clitheroekid]

At the risk of getting my knuckles rapped, this link is to Jeff Fairburn's settlement agreement. Isn't he wonderful?

https://www.persimmonhomes.com/corporat ... lement.pdf

"The Company shall contribute up to £10,000 plus VAT but inclusive of any disbursements towards the reasonable legal fees incurred by Jeff in obtaining advice exclusively in respect of the termination of his employment."

I think that's what's known as adding insult to injury.

One would have imagined that Fairburn would just about have enough left over from his bonus to pay for his own legal advice. How on earth can Persimmon justify handing over another £10k to the greedy sod?

[Dod101]

I was hoping that CK could have enlightened us on that one. There is no doubt that Fairbairn could have afforded this himself but maybe there is a contractual agreement. OTOH it may be that Persimmon has been advised to do this so that there can be no come back at a later date. In such an event, the Company would be able to say 'Look we gave you the means to get independent legal advice. Don't come back now and say we have screwed you'. I would think that is surely the answer. It is in fact protection for Persimmon and of course peanuts compared to what they have already paid, immaterial really.

Dod

[Bouleversee]

It does seem rather odd that the company paid for the legal advice which confirmed that there was nothing they could do to stop him getting his trotters on any of the dosh. Do I gather that he still has a lot more to come because they asked him to leave rather than the other way round? He must have a hide like a rhino not to have volunteered to forego any more LTIP payments. All that money won't bring him happiness.

I hope this will make the large shareholders scrutinise all company LTIP and bonus arrangements more carefully in future. The sums paid in many cases are totally out of proportion to the efforts of the recipients.

[Dod101]

As far as I know he still has share options which do not vest until 2021. There was an interesting article in the weekend papers where they commented that what did for him was his apparent inability to understand that these days there has to be more to running a company successfully than simply the financial results. I would have thought that someone like him would have known that and he does not sound very bright. After all, it is said that much of the success was down to the Help to Buy Scheme and Persimmon happened to be at the right end of the market to benefit from that, unlike some of the other, higher end, housebuilders. And Fairbairn just happened to benefit at exactly the right time through a poorly thought through LTIP, which simply made matters worse.

As you say Bouleversee difficult to see how he can live with that.

Dod