Lakehouse explores shareholder revolt
The directors of social housing contractor Lakehouse have said they want to find out why roughly a third of the shareholder base appears to have little confidence in the company’s governance.
At the company’s annual general meeting on Friday 5th February 2016, there was substantial opposition to the re-election of certain directors and to the remuneration package that they are receiving.
Some 28.69% of shares voted against the re-election of executive chairman Stuart Black and 28.41% voted against chief executive Sean Birrane.
The re-election of Jill Ainscough as a non-executive director was opposed by a similarly high proportion of shareholders, with 28.48% voting against her. Jill Ainscough, former Ofcom chief operating officer, chairs Lakehouse's remuneration committee.
By contrast, chief financial officer Jeremy Simpson, executive director Michael McMahon and senior non-executive director Chris Geoghegan all received virtually unanimous support from shareholders.
Lakehouse’s directors pay policy is also clearly a cause for concern. A resolution to approve the directors' remuneration report was opposed by 31.82%, while the resolution to approve the directors' remuneration policy was similarly opposed by 32.48% of the shareholder base.
A resolution to authorise the directors to allot equity securities pursuant to s570 of the Companies Act 2006 was opposed by 39.97%.
A resolution to authorise political donations and expenditure was equally close, with 39.14% against.
These matters are normally supposed to be a formality, although this is new territory for Lakehouse as it was privately owned until its stock market listing last year.
In Lakehouse's 2015 annual report, Jill Ainscough wrote: “We are committed to active engagement with our shareholders. As part of the preparation for our IPO we ensured that major shareholders were kept informed in respect of remuneration and that remuneration was clearly disclosed to shareholders in the IPO prospectus. We have also recently sought feedback from our major shareholders in advance of the publication of the remuneration policy report, to explain our approach to addressing the remuneration of executive directors and the AGM resolution.”
After the AGM the directors said in a statement: “The board notes that shareholders representing a significant number of shares voted against a number of resolutions. The board will continue to explore and understand the reasons behind their voting.”
Lakehouse share price fell from 87p to 35p at the beginning of last week after it issued a profits warning.
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This article was published on 8 Feb 2016 (last updated on 8 Feb 2016).