ShareSoc Requests More Power for Ultimate Investors

PRESS RELEASE 83 25/10/2016

ShareSoc (the UK Individual Shareholders Society) has today submitted its written evidence to the Business, Innovation and Skills Committee inquiry on corporate governance.

In summary:

The goal should be to get more power back to the ultimate investors. This can be achieved by:

Ensuring that individual shareholders can exercise their rights, even if their shares are held in nominee accounts.
ShareSoc, if sufficiently well resourced, can play a role by ensuring that individual shareholders are educated about their rights and how to exercise them. There should be government and/or NGO support for representative organisations such as ShareSoc, in particular for educational work.
Insisting that the London Stock Exchange properly regulate the AIM market.
Requiring a binding annual vote on the remuneration report (which vote is currently only advisory and has proved to be ineffective).
Requiring companies to disclose the Pay Ratios over the previous 10 years of the CEO to the average employee and of the CEO to the second-highest paid employee. The 10-year disclosure will create the right long-term emphasis on this ratio, in a similar way to the TSR graph and table of CEO remuneration.
Introducing shareholder committees as outlined in the paper by Chris Philp MP “Restoring responsible ownership: ending the ownerless corporation and controlling executive pay”, comprising of the five largest willing shareholders and a representative of individual investors.
Government stating its support for the ShareSoc Remuneration Guidelines, which recommend that the average FTSE 100 CEO pay should be reduced by approximately half and in particular that the maximum annual bonus should be 100% of salary and maximum long-term incentive award should be 100% of salary per year, except in the first year of appointment for external recruits.

The views of individual shareholders tend to be under-represented in many policy discussions, which is surprising as often they have very sensible opinions based on quite detailed knowledge of how business and the markets work. Part of the problem is the way that individual shareholders are disenfranchised through the way nominee accounts operate.

There is a particular problem in relation to some AIM companies. The AIM market, which is run by the London Stock Exchange (LSE), has been frequently criticised for the quality of some companies listed on the market and for the way it operates. ShareSoc and its Members think that some reform is necessary.

ShareSoc has recently issued its Remuneration Guidelines, which contain a number of practical actions that could be implemented easily and a number of other ideas for discussion.

Individual investors do not have effective power to curb directors’ pay. Fund managers, who are merely intermediaries in the ownership chain, have usurped this power: but have patently failed to provide effective stewardship. They are responsible for creating many of the current problems, yet to date seem to have avoided blame. Why should we expect them to suddenly change their behaviour? It is time for a strong input from Government and regulators of the London Stock Exchange to change the framework in which we are currently operating. The goal should be to get more power back to the ultimate investors and hence make capitalism work for everyone.

Our full submission to the Parliament BIS Select Committee Inquiry on Corporate Governance is present here: BIS-Committee-Submission

For more information, please contact:

Roger Lawson
Deputy Chairman, ShareSoc
Telephone: 020-8295-0378

Or:
Cliff Weight, Director and Remuneration Spokesman, ShareSoc
Telephone: 01737-202075

Post Date: October 25, 2016

Group description:	Our group is interested in sustainable investing and our goal is to identify and evaluate businesses that will thrive through innovation and their transition to a ‘One Planet Economy’. By leveraging the skills of group members, we aim to deeply understand these businesses, particularly focusing on how they develop long-term valuable benefits for their customers. Each year, we plan to evaluate around seven businesses to identify opportunities where our valuation exceeds the market price. A successful outcome is defined as achieving a compound annual growth rate (CAGR), including dividends, of 10% over a decade.
Meeting Type/Venue:	Meetings are in-person in a pub near to Waterloo station in London.
Meeting Frequency/Timing:	Meetings are bi-monthly on a Monday from 10:45am to 4:30pm. Members are expected to also pay for their own lunch which secures the group free use of a private room in the pub. The cost is expected to be £35-40 per person, per meeting, in addition to your SIGnet membership fee.

Group description:	SIGnet Taunton is a new group with around 10 keen members at present, with a range of investment styles and experience. We welcome new members.
Meeting Type/Venue:	In person meetings at a golf club near to the centre of Taunton.
Meeting Frequency/Timing:	We meet on the first Monday of every month at a golf club near to the centre of Taunton, 11am until 3pm with a lunch break.

Group description:	An online group for those who are new to investing, or have only been investing for a few years. Including topics such as: – What is a share or a bond, why and how to buy them. – Comparing funds, unit trusts, Investment trusts and exchange traded funds. – Portfolio management and diversification. – ISAs, pensions, SIPPS and how to save tax. – How terms such as PE ratio and dividend yield are used to value a share. – How to use technical analysis or charting.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Monday of the month at 7:00pm.

Group description:	An online group for those who already have some experience in investing. Covering topics such as finding companies to invest in, financial statements and ratios, valuation / margin of safety, analysis of companies and investment trusts and exchange traded funds.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Wednesday of the month at 7:00pm.

Group description:	The Equity Income Group welcomes investors of all levels of experience, from beginners to advanced. The focus of meetings is on dividend paying Investment Trusts, though there is also discussion around individual shares.
Meeting Type/Venue:	Meetings are held online.
Meeting Frequency/Timing:	Meetings are held every 6 weeks on a weekday between 7 and 8:30pm.

Group description:	A welcoming group open to all types of investors. Typical meeting content is to have a deep dive presentation on a topic selected by the participants and a session on buy/ sell/ key lessons learnt last month.
Meeting Type/Venue:	In person at a friendly pub close to Piccadilly Circus
Meeting Frequency/Timing:	Monthly during the evening on the first Wednesday of the month.

Group description:	All levels of experience welcome. A typical meeting agenda includes: – Macro Environment – Trades: Members review existing positions and identify securities with promising TA entry patterns or setups and with suitable risk/reward. Any security, long, short, futures, options may be considered. The convener takes actual positions in trades and maintains his own detailed ledger, accurately measuring performance of individual securities and cumulative activity. Members are notified by e-mail prior to the entries or exits that are decided upon. Following each meeting an updated copy of the ledger is circulated together with the next meeting agenda. Members may wish to maintain similar ledgers of their own but there is no obligation to do so. – Technical Analysis: Techniques and systems used in trades. Members can request discussion of particular aspects of TA.
Meeting Type/Venue:	Online via Zoom
Meeting Frequency/Timing:	The first Tuesday of every month from 7 to 9pm

Group description:	Open to all investors / people with an interest in investing. Typical meeting will involve members talking about recent purchases, successes, failures and possible future purchases. Also with occasional visiting speakers or members making presentations on a topic of interest.
Meeting Type/Venue:	We aim to meet on the last Tuesday of each month in a private room at a pub in Playhatch. Start time 7pm with members encouraged to meet up around 6pm for a bite to eat / drink before hand, if their diaries allow.
Meeting Frequency/Timing:	7pm on the last Tuesday of the month. Meetings likely to last about two hours but with informal ‘overspill’ before / after.

Group description:	This group was set up as a forum to discuss companies in detail, each company is introduced by a member and discussion may last one or two hours. Membership is by invitation only and is for experienced investors.
Meeting Type/Venue:	The group meets at a venue in Waterloo, London.
Meeting Frequency/Timing:	Meetings are on Tuesday mornings at two month intervals.

ShareSoc Requests More Power for Ultimate Investors

PRESS RELEASE 83 25/10/2016

ShareSoc (the UK Individual Shareholders Society) has today submitted its written evidence to the Business, Innovation and Skills Committee inquiry on corporate governance.

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