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Shareholder Spring - Shareholders Revolt against Crappy Managements
VituVingiSana
#1 Posted : Friday, May 11, 2012 1:37:32 AM
Rank: Chief


Joined: 1/3/2007
Posts: 9,227
Location: Nairobi
http://www.guardian.co.u...ing-continues-pendragon

Shareholder Spring - Shareholders Revolt

The shareholder spring continued to blossom on Thursday when the remuneration report of car dealership Pendragon was voted down – the third to be rejected by shareholders this year – and media group Trinity Mirror scraped through a protest vote over pay.

In a sign that there is no let-up in the current wave of shareholder activism, other companies endured revolts on Thursday, including media group Mecom and gaming company Sportech.

The focus will now turn to Centrica, the owner of British Gas, which is preparing for a rebellion at its annual meeting on Friday, and then materials science company Cookson and online gambling group 888, which hold annual meetings next week.

Advisory body Pirc has recommended voting against every member of the Cookson board and the Association of British Insurers (ABI), whose members represent a significant group of institutional investors, has issued a "red-top" alert – which warns members of serious concerns – at Cookson and 888.

Pendragon had also been the subject of an ABI alert to investors, while Pirc had recommended voting against the pay deals. That helped trigger the hefty defeat of the remuneration report: 67% of Pendragon investors voted against, causing the firm to withdraw its attempts to increase the potential bonus for directors from 100% of their salaries to 150%.

At Trinity Mirror – where chief executive Sly Bailey had already become a victim of the shareholder spring after resigning last week – 46% of investors voted against the remuneration report while the level of protest rose to 54% if deliberate abstentions were included.

Almost a quarter of shareholders voted against the publisher's long-term incentive plan, and Jane Lighting, the former chief executive of Channel 5, who heads the remuneration committee, failed to win the backing of one in five of shareholders. Just under 15% of investors failed to back Bailey, whose £14m pay deals over 10 years have infuriated investors amid a slump in the company's market value from more than £1bn to £80m. The backlash came despite her promise to leave by the end of the year.

Pendragon's remuneration report is the third to be voted down this year. The small gold-exploration company Central Rand Gold suffered a 75% revolt against its pay policy last month while insurance company Aviva had its report voted down last week, sparking the resignation of chief executive Andrew Moss on Tuesday.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
VituVingiSana
#2 Posted : Friday, May 11, 2012 1:39:39 AM
Rank: Chief


Joined: 1/3/2007
Posts: 9,227
Location: Nairobi
I like the trend where shareholders are saying enough is enough for huge pay for poor performance.

Let's see which Kenyan firms come under this criteria!

Olympia Capital

The CEO, michael matu, has decimated shareholder value since the Rights Issue at 14/- about 5 years ago. Losses are the order of the day with the Share Price at 3.50 with hardly any dividends.

The chairman is chris obura who has overseen the destruction of value without lifting a finger.

Sameer Africa (Firestone)

The power behind the throne is naushad merali. I don't even follow the price. The original price was 35.50 but has fallen dramatically since the Offer For Sale. Has it ever issued a bonus?

Eveready

Never-ready as I call it. I think it went public at 9.50 & is now 1.50 & that sums it up. At some point I expect it to be bought out for a pittance for its real estate.

Kenya Airways
Apparently the CEO has zero shares, the FD has 6,504 shares. The pay package was 66,000,000 in 2011. The profit warning issued for 2H 2011-12 (Final Results not released yet) will mean another poor year for KQ.

Express Kenya

Not sure what to say. I think that chris obura is or was the chairman. Certainly avoid the companies he heads!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
hisah
#3 Posted : Friday, May 11, 2012 9:27:52 AM
Rank: Chief


Joined: 8/4/2010
Posts: 6,528
Just like employees' appraisals, shareholders should appraise the biz management team. Hefty pay with sustained poor performance shouldn't be rewarded.

Personally I avoid firms where the top executives don't hold a chunk of shares. If they perform poorly & the market equally returns the favour, they don't feel the shareholders pain. How can one be a long term investor of such a firm while the top executives hardly want to hold the cookie jar? Unless that cookie jar is not a cookie jar...

Jamani
#4 Posted : Friday, May 11, 2012 9:43:09 AM
Rank: Elder


Joined: 9/12/2006
Posts: 1,535
Most of them dont want to be listed as owning shares, they hide their names under companies... As both of you put i would also like to see some of this activism of shareholders pushing management for performance and results.. a clear appraisal profitability linked to pay... the situation we have is so bad profit warns/losses no dividends etc and still we approve pay hikes for these people....something is very wrong
QW25091985
#5 Posted : Friday, May 11, 2012 10:00:57 AM
Rank: User


Joined: 1/24/2012
Posts: 1,675
Location: In Da Hood
Helo.please wakeup. this is kenya !!!!!!!!!!!!!
LOL. ati shareholder activism ? give me a break .
some of these ceos wouldn't take their company's shares even if they had a gun pointing at them !
Jamani
#6 Posted : Friday, May 11, 2012 10:23:44 AM
Rank: Elder


Joined: 9/12/2006
Posts: 1,535
Qw you are still wounded and we understand your pain.... I am a positive thinker and I believe nothing is not possible and no one is forcing the CEOs to take up shares we are raising issues of their compensation based on performance..... the share issue comes up when comparing companies that management have shares and those that management doesnt have and it comes up that where management have no shares listed against their names performance is wanting....get it Mr. analyst ?
We are not sleeping thats the reason we are seeing and raising this challenge and we need to do something about, being Kenya or not we have to change the anomaly, its only from our concerted efforts that this shall be changed... we shall not seat analyze as you do then come up with a lazy statement of analysis that this is Kenya. We have to think to reach vision 2030... no lazy analysis.....
Thiong'o
#7 Posted : Friday, May 11, 2012 10:25:44 AM
Rank: Member


Joined: 10/14/2011
Posts: 388
and a Rosy Talk Make Shareholders See Red, with overly optimistic statements in company disclosures increasing litigation risks.

http://www.strategy-busi...65ff&cid=20120209rr
QW25091985
#8 Posted : Friday, May 11, 2012 10:26:51 AM
Rank: User


Joined: 1/24/2012
Posts: 1,675
Location: In Da Hood
Jamani wrote:
Qw you are still wounded and we understand your pain.... I am a positive thinker and I believe nothing is not possible and no one is forcing the CEOs to take up shares we are raising issues of their compensation based on performance..... the share issue comes up when comparing companies that management have shares and those that management doesnt have and it comes up that where management have no shares listed against their names performance is wanting....get it Mr. analyst ?
We are not sleeping thats the reason we are seeing and raising this challenge and we need to do something about, being Kenya or not we have to change the anomaly, its only from our concerted efforts that this shall be changed... we shall not seat analyze as you do then come up with a lazy statement of analysis that this is Kenya. We have to think to reach vision 2030... no lazy analysis.....


you are starting to get borin'
perepepe mingi tu ndio iko . i think you are on of those people who are so quick in formulating policies but are lazy to implement them . you continue thinking about vision 2030 ... 2050 ...2080 ...20????
Jamani
#9 Posted : Friday, May 11, 2012 10:30:10 AM
Rank: Elder


Joined: 9/12/2006
Posts: 1,535
QW25091985 wrote:
Jamani wrote:
Qw you are still wounded and we understand your pain.... I am a positive thinker and I believe nothing is not possible and no one is forcing the CEOs to take up shares we are raising issues of their compensation based on performance..... the share issue comes up when comparing companies that management have shares and those that management doesnt have and it comes up that where management have no shares listed against their names performance is wanting....get it Mr. analyst ?
We are not sleeping thats the reason we are seeing and raising this challenge and we need to do something about, being Kenya or not we have to change the anomaly, its only from our concerted efforts that this shall be changed... we shall not seat analyze as you do then come up with a lazy statement of analysis that this is Kenya. We have to think to reach vision 2030... no lazy analysis.....


you are starting to get borin'


Thank you Mr. Analyst just dont read my comments or make lazy analysis here.
GenghisCapitalLtd
#10 Posted : Friday, May 11, 2012 10:34:24 AM

Rank: Bona-fide


Joined: 11/2/2011
Posts: 191
Location: Nairobi
VituVingiSana interesting topic!! As much we want to adopt what's happening in the UK, I think we are still a few lightyears off. The day that Kenyans realise that they are the owners of the company by simply getting into shares is the day that they know they hold the power. It all boils down to the regulator and the industry players in educating market participants. Am I optimistic that we will achieve this by 2030? The way things are no way, the right people are not in charge of the regulatory body - achieve that then we would have taken a HUGE step in the right direction but I am optimistic that shareholder activism will happen in our lifetime...fingers crossed though.
Follow us on Twitter @genghiscapital
“Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.” Steve Jobs,iGenius
Jamani
#11 Posted : Friday, May 11, 2012 10:38:52 AM
Rank: Elder


Joined: 9/12/2006
Posts: 1,535
QW25091985 wrote:
Jamani wrote:
Qw you are still wounded and we understand your pain.... I am a positive thinker and I believe nothing is not possible and no one is forcing the CEOs to take up shares we are raising issues of their compensation based on performance..... the share issue comes up when comparing companies that management have shares and those that management doesnt have and it comes up that where management have no shares listed against their names performance is wanting....get it Mr. analyst ?
We are not sleeping thats the reason we are seeing and raising this challenge and we need to do something about, being Kenya or not we have to change the anomaly, its only from our concerted efforts that this shall be changed... we shall not seat analyze as you do then come up with a lazy statement of analysis that this is Kenya. We have to think to reach vision 2030... no lazy analysis.....


you are starting to get borin'
perepepe mingi tu ndio iko . i think you are on of those people who are so quick in formulating policies but are lazy to implement them . you continue thinking about vision 2030 ... 2050 ...2080 ...20????


Mr. Analyst you know nothing about me...sorry, I dont wish to engage you at a personal level i will leave your thinking to your self, if thats your analysis then good for you. I will focus my positive energy and concentrate on the interesting topic that has been raised by VVS.
youcan'tstopusnow
#12 Posted : Friday, May 11, 2012 11:27:29 AM
Rank: Chief


Joined: 3/24/2010
Posts: 6,777
Location: Black Africa
I think that one needs to be aware of what they are buying into. Odds are management aren't brilliant then turn crappy after some time. They were probably crappy in the first place!

A basic tenet you should also consider:

"The minority will have their say, but the majority will have their way"

Unfortunately, there is ALWAYS a risk in being in the minority
GOD BLESS YOUR LIFE
youcan'tstopusnow
#13 Posted : Friday, May 11, 2012 11:32:24 AM
Rank: Chief


Joined: 3/24/2010
Posts: 6,777
Location: Black Africa
But it is nice to see that shareholder activism in Kenya has evolved from going to AGM's and demanding umbrellas and free lunches! The KQ court case shows this...

GOD BLESS YOUR LIFE
Jamani
#14 Posted : Friday, May 11, 2012 11:36:53 AM
Rank: Elder


Joined: 9/12/2006
Posts: 1,535
It should evolve beyond just raising hands to adopt everything without questioning or clarity on issues they are voting for.
VituVingiSana
#15 Posted : Friday, May 11, 2012 11:37:38 AM
Rank: Chief


Joined: 1/3/2007
Posts: 9,227
Location: Nairobi
GenghisCapitalLtd wrote:
VituVingiSana interesting topic!! As much we want to adopt what's happening in the UK, I think we are still a few lightyears off. The day that Kenyans realise that they are the owners of the company by simply getting into shares is the day that they know they hold the power. It all boils down to the regulator and the industry players in educating market participants. Am I optimistic that we will achieve this by 2030? The way things are no way, the right people are not in charge of the regulatory body - achieve that then we would have taken a HUGE step in the right direction but I am optimistic that shareholder activism will happen in our lifetime...fingers crossed though.

Look at CMC where Ndungu & Kibe sued the some of the Board & management

KQ (which Ndungu was a huge shareholder) was sued for the Rights Issue

I expect similar complaints (even if not legal) coming up
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
muganda
#16 Posted : Friday, May 11, 2012 12:57:33 PM
Rank: Elder


Joined: 9/15/2006
Posts: 2,517
@VVS may be onto something. More news...

Jeffrey Rosen, chairman of the remuneration committee at WPP, is to embark on a series of meetings with investors in an attempt to head off a row over a 30% pay rise for chief executive Sir Martin Sorrell.

Even before the current wave of shareholder activism - dubbed the "shareholder spring" - WPP was forced to rethink the scale of the pay rise for Sorrell, who founded the firm more than 25 years ago. In the autumn, WPP presented a plan to shareholders to hand Sorrell - already on a basic salary of £1m a year - a 50% pay rise but this was scaled back to 30% when the annual report was published last month.

http://www.guardian.co.uk/busin...rrell-pay-row?intcmp=239


Thiong'o
#17 Posted : Friday, May 11, 2012 1:26:39 PM
Rank: Member


Joined: 10/14/2011
Posts: 388
Companies exist to create wealth for the owners –the shareholders.
Even with companies adopting best codes & guidelines on Good Practices in Corporate Governance, and/or even industry legislating to set indemnities for directors (holding them liable to set limits) as is the case with SACCO’s, -these don’t exist in a vacuum.
Company’s performance and share value addition is the bottom line.
Thiong'o
#18 Posted : Sunday, May 13, 2012 10:27:29 PM
Rank: Member


Joined: 10/14/2011
Posts: 388
kyt
#19 Posted : Monday, May 14, 2012 3:30:56 PM
Rank: Elder


Joined: 11/7/2007
Posts: 1,823
@vvs, firestone rise to 35.5 was purely because of speculative activities nothing about fundamentals its fair was abt 12 - 15 bob. that said though, it is now 1/3 of its then value so iko shinda. pan africa je? kengen?
LOVE WHAT YOU DO, DO WHAT YOU LOVE.
VituVingiSana
#20 Posted : Monday, May 14, 2012 4:19:05 PM
Rank: Chief


Joined: 1/3/2007
Posts: 9,227
Location: Nairobi
kyt wrote:
@vvs, firestone rise to 35.5 was purely because of speculative activities nothing about fundamentals its fair was abt 12 - 15 bob. that said though, it is now 1/3 of its then value so iko shinda. pan africa je? kengen?

The Offer for Sale [merali sold his shares] to the unsuspecting public at 35.50
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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