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On 16 February 2022, Liontrust Asset Management plc (Liontrust) suffered a considerable investor revolt against its new remuneration policy and long term incentive plan (LTIP) at its general meeting, both resolutions barely managing to scrape through with only 54.1% and 55.6% support respectively.

Although Liontrust acknowledged the dissent in its disclosed , the LSE-listed asset manager stated that it was ‘disappointed’ in the level of shareholder support and highlighted its ‘extensive and positive engagement with…[its] top 20 shareholders on the pay proposals’, which ‘included two rounds of engagement and consultation’. This engagement apparently led to various amendments being made, including ‘the move to a more traditional annual LTIP structure rather than a one-off five-year plan and further stretch placed within the level of performance required to achieve maximum vesting under the LTIP’. However, the company also noted that in the aftermath of the revolt it intends to reflect on shareholder feedback and disclose an update statement within six months of the meeting in accordance with the UK Corporate Governance Code.

Liontrust’s last remuneration policy and LTIP were at a general meeting in September 2018, with 60.7% and 61.2% of shareholder votes cast in favour respectively. Since then, the asset manager has been promoted to the FTSE 250 (as of 22 June 2020), and the market capitalisation of the company has from £325m to £1.35bn (as of 31 December 2021).

Liontrust’s Remuneration Committee therefore argued that the salaries of the company’s chief executive, John Ions, and combined CFO/COO, Vinay Abrol, which before the new remuneration policy stood at £348,000 and £328,000, should be brought up to that of the FTSE 250 market median. This translated to the new salaries of £550,000 and £420,000—increases of 58% and 28% respectively. In addition, the new policy allows Ions and Abrol to receive annual bonuses of up to 450% and 350% of base salary, although the Committee noted that ‘the full payout will only be earned for exceptional holistic performance’. It further justified such amendments on the grounds that the ‘salary levels [of Liontrust’s executive directors] have only [had] one increase of 5% since 2015’.

Liontrust is not the only FTSE 350 company so far in 2022 to see its remuneration policy raise the ire of its shareholders, with and policies receiving 32.5% and 26.6% opposition respectively. However, with 45.9% of shareholder votes cast against, Liontrust’s revolt marks the largest against a policy so far. Interestingly, the votes on the asset manager’s policy and LTIP were conducted at a general meeting separate from its annual general meeting (AGM), which is set to take place later this year. Liontrust’s 2021 AGM on 23 September 2021 low levels of investor dissent. The most contentious resolution was the asset manager’s remuneration report, which received opposition of 9.5%.  

According to Market Tracker voting data, the 2021 AGM season saw 17 FTSE 350 companies receive ‘significant’ (at least 20%) levels of dissent against their remuneration policy. It is yet to be seen if the 2022 AGM season will see an even greater backlash against executive pay practices.

The shareholder dissent against the policy and LTIP seems to have done little to Liontrust’s share price, which peaked at £15.62 per share on 16 February 2022 before falling a paltry 1.2% to £15.44 per share as of 1pm GMT on 17 February 2022.