Legal & General has emerged as the leader of the “shareholder spring” which saw an unprecedented number of companies held to account for poor practice on issues such as bosses pay, an investigation by the Evening Standard’s sister newspaper, The Independent, has revealed.
Between April and June, L&G Investment Management, which holds around 4% of the UK stock market, opposed management resolutions at 76 companies, more than half the already high total of 125 “no” votes for the whole of 2011.
L&G has even voted against other insurers, including Aviva whose chief executive Andrew Moss quit in May as a casualty of the “shareholder spring”
By June the fund manager’s corporate governance unit was opposing management resolutions at a third of annual meetings.
Amid calls for City institutions to exercise greater stewardship over the companies in which they invest on behalf of ordinary savers, L&G’s activism stands in contrast to more traditionally minded fund managers such as the Prudential-owned M&G or the US fund manager Fidelity.
An analysis of M&G’s records uncovered 24 votes against management in the same three months. That total included several abstentions in addition to fully fledged “no” votes. Fidelity managed 26.
The analysis included votes against the re-election of particular directors as well as those on more technical matters such as waivers of existing shareholders’ “pre-emption” rights, which give them first refusal to buy new shares. A “no” vote on a technical matter still arguably shows a fund manager is exercising stewardship.
