De La Rue emerges from AGM unscathed - almost

Phil Taylor, 30-Jul-2019

De La Rue went into its annual general meeting last week facing an investor revolt, but got all its resolutions voted through, albeit in some cases by a slim margin.

Chairman Philip Rogerson was re-elected by a thumping margin of almost 92% of votes cast, despite calls that he should step down by activist investor Crystal Amber, which owns around 6.4% of De La Rue’s shares. Other corporate officers including outgoing chief executive Martin Sutherland (pictured) were also comfortably re-elected.

The one black spot on the day was the Brexit-like margin approving De La Rue’s remuneration report, passed with 52 per cent of shareholders in favour and 48 percent against. For comparison, at last year’s AGM De La Rue’s remuneration report passed with 98 per cent of the vote in favour, and Bloomberg suggests just four other UK companies have had larger revolts on their remuneration reports this year.

That narrow victory reflects discontent about the company’s pay policies, which have also been attacked by Crystal Amber.

The activist investor has said it is “shameful” that Sutherland’s £954,000 pay out includes a £197,000 bonus and £106,00 in long-term incentives at a time when the business has issued a series of profit warnings, an £18m bad debt in Venezuela and layoffs at its Gateshead banknote and security printing plant.

De La Rue's CEO banked a £197k bonus because of an £18 million invoice to the Venezuelan central bank. Then De La Rue provided for this as an £18m bad debt. Yet, the bonus was unaffected by this 30% hit to underlying profits. Shameful corporate greed. https://t.co/HdVQbhpwWN
— Richard Bernstein (@CrystalAmberRB1) July 25, 2019

Adding to the pressure on the company, De La Rue has also just revealed that it is being investigated by the UK Serious Fraud Office “in relation to suspected corruption in the conduct of business” in South Sudan.

In a statement, De La Rue said it was pleased that all the resolutions at the AGM had passed, but was “disappointed with the lower level of support received for the advisory vote on our remuneration report.”

It went on to say that it is “continuing to engage with shareholders to further understand and determine how best to address their concerns.” A new policy will be put forward for approval at next year’s AGM.