Braemar’s top two executives took home less pay in the UK-listed shipbroker’s last financial year as shareholders rebelled against the executive rewards policy in even bigger numbers than last year.
The London shop’s annual report for the 2023/2024 period shows chief executive James Gundy received a bonus of £2.35m ($2.99m), down from £2.95m the year before.
Chief operating officer Tris Simmonds banked a bonus of £1.125m, against £1.25m 12 months earlier.
Gundy’s base salary was £475,000, up from £450,000 year on year. Total remuneration was £2.85m, down from £4.11m the previous year.
Simmonds’ wage rose to £375,000, up from £333m, for a total of £1.54m, down from £1.6m.
Braemar said base salaries will be frozen for the current year.
Later on Wednesday, the brokerage released the results of its annual general meeting held in London.
In December, Braemar said it would stick with its pay policy after surviving a big “no” vote from proxy shareholder companies.
The directors’ remuneration report (DRR) garnered only 57% backing in 2023.
On Wednesday, this figure dropped to 54.9%.
The long-term incentive plan also came in under 80%.
Talks with shareholders on the cards
Simmonds only won approval from 74% of investors for re-election. Gundy was on 85%, while chairman Nigel Payne received 79% of the votes.
The board said it noted five items received more than 20% of votes against.
The UK Financial Reporting Council’s code of corporate governance suggests that the board of a company should consult major shareholders if there is a vote of more than 20% against a resolution.
Braemar has said it is happy to do so.
Director Elizabeth Gooch, on behalf of the remuneration committee, said on Wednesday that last year’s vote had been considered.
But the board still believes the policy of rewarding top brass as both executives and working brokers is “clearly in the best interests of all stakeholders of the business”.
Gooch, who herself only received 78% backing for re-election, admitted pay structures remained “atypical” compared with the norm at UK-listed companies.
“However, they are proven to work within Braemar as well as being accepted practice across the shipbroking sector and other commission-based businesses,” Gooch explained.
“The board still considers that the business is better served by the CEO and COO leading the broking divisions, rather than a non-broking CEO and COO being appointed,” she added.
No direct engagement
Gooch said that some of the proxy advice given to investors did not take account of the company’s specific business model and governance structures, and were not informed by any direct engagement with the company.
“We also note the recent comments by some of the main UK investor representative bodies, who recognise that a ‘one size fits all’ approach towards executive remuneration is potentially damaging to the competitiveness of UK listed companies, especially in global businesses,” she said.
London-listed rival Clarksons also continues to face large investor revolts on the issue.
Braemar also issued a trading update, saying it has continued to perform well so far this year, matching expectations.
“The group remains focused on its stated growth strategy and the board looks to the year ahead and beyond with confidence,” Braemar said.
The analyst consensus for underlying annual operating profit is currently £18.2m, with revenue expected to be £152.7m.
