Pioneering listed law firm Gateley narrowly survived a major shareholder revolt against its directors’ remuneration report.
Some 28m votes were against adopting the remuneration report at Friday’s annual general meeting, while a further 1.4m votes were withheld. Nearly 31m were in favour.
In a statement, Gateley said: “The board is aware that, in some cases, such voting was influenced by a report produced by a proxy shareholder services company, which recommended to institutional shareholders that they vote against this resolution.
“The board intends to engage both with the relevant institutional shareholders and the proxy shareholder services company itself to better understand their respective positions, as well as to explain to each why the board believes that the findings in the report are not based upon all of the information which is relevant and are, therefore, inappropriate in this instance.”
It is not clear what the recommendation was or what it was based on.
Gateley cancelled both its interim and final year dividend for 2020 due to Covid-19. Announcing its results in September, the board said its intention was “to re-instate dividend payments at the earliest sensible opportunity and will review its position once the outturn for FY21 is known”.
The UK’s first listed law firm announced a 6% increase in revenue to £110m in the year to 30 April, of which 3.5% was organic and 2.5% from the four acquisitions of complementary non-legal businesses it made during the year.
The remuneration report said that, during the year, the firm implemented and made awards under a new long-term incentive plan (LTIP) for executive directors and selected senior employees, determined salary increases and “incentive outcomes” for the executive directors, and set the arrangements for the new chief executive, Rod Waldie, who took over from Michael Ward on 1 May 2020 – at the same salary of £260,000.
“Salary increases awarded during the year reflect the committee’s intention for executive remuneration to be competitively positioned for the commencement of the 2021 financial year,” it said. Due to Covid, they did not receive any bonuses.
Awards under the LTIP were originally granted to executive directors and other senior employees in February, but these were then cancelled because the earnings per share performance targets were no longer considered achievable given the impact of the pandemic.
It made new LTIP awards in July to the same employees in the same proportions, but 28% more awards were granted overall “to enhance incentivisation during the difficult and challenging economic conditions encountered due to the impact of the COVID-19 pandemic”.
The board said the targets were considered “appropriately stretching taking into account the current economic environment”.