Beware Corporate Britain! The intervenist shareholder is back.

May 27th, 2009 by admin | Filed under Daily News, Recession, Stocks and shares.

moneyinfo1 There was a not so silent revolt at Shell last week, signalling the growth of a long overdue trend of discontented shareholders are making their feelings of discontent at many of the UK’s leading public companies management bonus orientated style. And this was far from a minority faction of Shell’s shareholders, with representatives of more than sixty per cent of investors succeeding to put the clamps on the company’s generous executive pay policy. An action that sent shockwaves through not only the oil industry but also through the entire the UK corporate community.

And Shell’s disgruntled shareholders are not the only ones who are saying no more! A few short weeks ago, thirty four per cent of the shareholders attending the AGM of that other UK oil giant BP voted also against pay awards for senior management.

Just to show that this form of positive intervention is not restricted to the oil industry, but covers most public company was the ability of just 16.3 per cent of the investors at Barclays Bank to oust Marcus Agius as chairman of the company. They announced their dissatisfaction at Agius’s role in bringing in foreign backers to support the company during their recent financial crisis. .

Certain financial analysts view this new trend with a level of cynicism, significantly comparing it to “slamming of the stable door after the horse has bolted” which in certain cases may be accurate. However it would appear to be more than obvious that people who are shareholders in public companies will be taking a much more aggressive interest in how their investments are being handled, if personal and business expenses are being curtailed, and bonuses are paid out on profits earned.

Investors are now aware of the fact that City management teams have had an easy time the 10 to 15 years of plenty. Now that times are tough and profits lean, companies have to face these challenges too.”