This article reflects the opinions of its author and not necessarily those of ShareSoc.
A personal view from ShareSoc Director, Mark Bentley
Nationwide has chosen to hold its AGM online only, this year on 15th July. I believe that this will be a controversial AGM, so it is disappointing that the directors have chosen not to face Nationwide’s members in person.
The chief source of controversy, in my opinion, was the board’s decision to acquire Virgin Money, without consulting its members. Now, I am agnostic whether the decision was the right one or not and am suspicious that it may be largely a case of “empire building”. However, I am firmly of the view that a decision of such magnitude should be put to its members, as it would have to be if Nationwide were a public company. The board should be required to justify their proposal to Nationwide’s members.
In my eyes that is an unforgivable lapse in corporate governance, and I will vote against the re-election of the chair and CEO, as a consequence. Here are my votes on all the resolutions being put to the AGM:
- To receive the directors’ report, annual accounts etc. In favour.
- To approve the Directors’ Remuneration Report for the financial year ended 4 April 2024. Against.
The CEO’s base salary increased by 27.9% between 2022/23 and 2023/2024. This compares with an average increase of 6.5% for most of Nationwide’s workforce and is reflected in the CEO Pay:Median Pay ratio increasing from 56:1 to 64:1. As a mutual society, Nationwide should be setting a good example and not alienating its workforce by awarding much larger increases to executives than to the wider workforce.
- To approve the Directors’ Remuneration Policy. Against.The remuneration policy includes the following: “As discussed in the Committee Chair’s letter, under the new policy the maximum LTPP opportunity that may be awarded will increase from 100% to 300% of salary.” As set out in ShareSoc’s remuneration guidelines for larger companies, we believe 100% is sufficient and this ever ratcheting up of executives’ pay is detrimental to wider society.
A mutual society should seek to appoint senior executives who are not motivated largely by greed. Isn’t the 2023/24 CEO total payout of £2.4m enough? Nationwide’s CEO should be someone who is competent in banking and running a large organisation but who is also highly motivated by the mutual’s obligations and objectives for wider society.
- To re-appoint Ernst & Young LLP as Auditors until the end of the next AGM. In favour.
- To re-elect Debbie Crosbie. Against. As stated above – unforgiveable corporate governance failure by the CEO to undertake the VM acquisition without consulting members.
- To re-elect Tracey Graham. Against. Chair of the remuneration committee, approving excessive executive pay, as explained above.
- To re-elect Albert Hitchcock. In favour.
- To re-elect Alan Keir. In favour.
- To re-elect Debbie Klein. In favour.
- To re-elect Sally Orton. In favour.
- To re-elect Kevin Parry. Against. Chair of the board. Responsible for corporate governance.
- To re-elect Tamara Rajah. In favour.
- To re-elect Chris Rhodes. In favour.
- To re-elect Gillian Riley. In favour.
- To re-elect Phil Rivett. In favour.
- To approve the amendments to the Rules as stated in the Notice of AGM. In favour. I am slightly nervous about the proposed change to rule 38(b), concerning notices but I don’t think it’s sufficiently concerning to vote against the entire resolution. I’m not entirely clear what type of notices may be given purely by publication on Nationwide’s website – and whether members who don’t log in to the website regularly will become aware of them. Other than that, the proposed changes seem reasonable.
Whether or not you agree with my views, if you are a member of Nationwide, I urge you to vote, so that members’ views are properly represented to Nationwide’s board.
Mark Bentley, Director, ShareSoc
DISCLOSURE: The author is a member of the Nationwide Building Society.
Good to read that the ShareSoc Board are now beginning to realise that digital only AGMs are incredibly bad for good governance and democracy. In supporting digital only AGMs, the ShareSoc Board went against members and shareholders. Good to have you back on the right side at last. Digital only AGMs remain the biggest fight we have had in a very long time, we all need to pull together.
I have already been in contact with Nationwide, expressing my disappointment regarding their digital only AGM. I stated that this goes against every principle they claim to have.
Danny, As you well know ShareSoc, never supported Digital only AGMs. Our AGM Guidance document based on FRC guidelines (which we helped write) always stipulated Hybrid AGMs (Digital PLUS In person) as best practice. What we don’t condone is in person only events that are held in remote locations at awkward times, or rigged digital only events – both are which are designed to exclude shareholders from attending or asking awkward but necessary questions.
Amit. I will be the judge of what I ‘well know’, not you.
You and the ShareSoc Board endorsed and promoted the share your voice campaign which would have allowed companies by law to choose digital only AGMs. You had your guy produce a smoke blowing celebration of the M&S 2023 digital only AGM which went on your website and which you promoted via your weekly wrap up.
The ShareSoc 2023 AGM was digital only.
So Amit, you appear to be holding two opposing views. You endorse, promote and hold digital only AGMs whilst simultaneously claiming you do not support digital only AGMs. So which is it?
Thanks for this very useful post. Was aware of some of the issues you highlight, but struggled to work out how best to vote and was going to skip this year’s opportunity. Your help provided the guidance I needed. Please do this next and every year!
“However, I am firmly of the view that a decision of such magnitude should be put to its members, as it would have to be if Nationwide were a public company”
Agree with you Mark that this decision should have been put to members, but I think the new Listing Rules will mean that PLCs will now also be able to do deals like this without shareholder approval.
The changes to the listing rules are very concerning. I don’t think a regulatory race to the bottom will achieve the effect that the previous government was hoping for and will harm shareholder interests.
[…] member of the Nationwide Building Society you should read this on how to vote at the upcoming AGM: https://www.sharesoc.org/blog/meetings-for-investors/how-and-why-im-voting-at-nationwides-upcoming-a… . I am not but I certainly oppose any bonus scheme that can pay out 300% of base […]