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R&M to press on with pay plan despite shareholder revolt

R&M to press on with pay plan despite shareholder revolt

River & Mercantile (R&M) is to press on with a controversial pay settlement despite more than 25% of investors rejecting the proposal at the group’s AGM.

The business said that it would ‘consider the feedback provided and will engage in a dialogue with major shareholders’ but that this would not form part of its policy until the 2018 AGM.

The company’s largest single fund shareholders, Fraser Mackersie and Simon Moon of the Unicorn UK Income fund, declined to comment.

‘The remuneration committee recognises that, while a significant level of support has been received for the directors' remuneration policy, not all shareholders have voted in support and we value their feedback,’ River & Mercantile said in a statement.

With 77.4% of shareholders voting, 25.3% of investors opposed the plan.

Significant, albeit smaller, protest votes were registered against the reappointment of non-executive director Robin Minter-Kemp and recently appointed chair Jonathan Dawson, with 7.4% opposed.

In the 2018-20 directors' remuneration policy, the business proposed a cap on overall remuneration, and individual elements of its payment plan.

But it said ‘the actual vesting conditions that are intended to apply will be set only as and when the needs of the business are clear at around the time of grant’.

This freedom to set the terms of the payment on the fly were necessary to ‘reflect the fast expanding and changing profile of the group’s activities [and] in addition an EPS growth condition will also apply’.

A spokesperson for the business said that the company would offer a further response to investor concerns in next year's annual report.

They added: 'We engaged with shareholders and advisory bodies during this process.

'Whilst the policy was passed by a significant majority, we are always disappointed by votes cast against. We will continue to engage with our shareholders to understand their views.'

In full year results for the 12 months to the end of June, R&M registered a net inflow of £3.8 billion.

This was split between net sales of £2.2 billion and 'positive rebalancing flows in Derivative Solutions of £1.6 billion'. 

Meanwhile positive investment performance across all its divisions added £1.7 billion worth of assets. Overall, fee earning assets under management increased by 22% to £31 billion. Performance fees for the 12 months are estimated to be £12.5 million. 

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