An annual general meeting is the one day a year shareholders get to say things out loud. Mr Price's 93rd took four minutes, by Financial Mail's count. It was also the first real test in South Africa of a rule change that took effect in May, which turned the shareholder vote on executive pay from a piece of advice a board could note into an approval a board has to win.
The rule is built to make a bad vote expensive rather than embarrassing. Listed and state-owned companies now need an ordinary resolution to approve their remuneration policy. If shareholders reject the separate remuneration report, the non-executive directors who sit on the pay committee have to stand for re-election to that committee at the next meeting, and a second rejection in a row bars them from serving on it for two years. Companies also have to disclose the gap between their highest and lowest earners.
The vote it won
Both resolutions passed. A third of ordinary votes went against the pay policy, and about a quarter against the report. A year earlier, when the same vote carried no legal force, the opposition was about 26%. Mark Bowman, who chairs the remuneration and nominations committee, drew a 19.7% vote against his own re-election.
Mr Price had done the groundwork. Before the meeting it wrote to its biggest shareholders and put out an announcement inviting everyone else to talk, and the chairs of the board, the pay committee and the ethics committee between them spoke to holders of more than two thirds of the ordinary shares. Its own announcement afterwards called the outcome continued support and a favourable shareholder view of the group's remuneration philosophy, and named no concern at all.
The account that did not go in the announcement
Two other versions of the same meeting exist. Bloomberg reported that the company said shareholder concerns centred on how performance measures are weighted and how much it discloses about the strategic targets behind short-term bonuses, and that views differed among investors. Zwelakhe Mnguni, chief investment officer at Benguela Global Fund Managers, told Bloomberg that a third voting against after engagement on that scale is a useful early data point, and that engagement is no longer a substitute for substance. Financial Mail's Ann Crotty read the four minutes differently again, as a board whose closed-door meetings had not won its big investors over on directors' pay or on an unpopular overseas acquisition.
Mnguni expects more meetings and more disclosure first, and changes to pay structures only where boards keep meeting the same opposition. Binding votes will not automatically produce alignment, he told Bloomberg, but they make it more costly for a board to pretend the conversation is only about engagement.
On the same day as the vote, Mr Price moved Bowman out of the lead independent director seat and handed it to Lucia Swartz. He stays on as chair of the pay committee.
