Global Investing

(This May 25 post has been updated to reflect AGMs which took place on Friday and to include graphics)

We’ve just witnessed a stirring spectacle of shareholder empowerment during the British AGM season. Haven’t we?

Well…. I’ve pulled together some numbers on remuneration resolutions from the 63 FTSE100 AGMs we’ve seen so far this year which shows that the average protest vote against pay did indeed go up from 2011 to 2012….

…by 0.2%.

Not quite the man-the-barricades spirit evoked by talk of a ‘Shareholder Spring’.

The average vote against executives’ pay deals was 8.2% compared to 8.0% last year for the companies that now make up the FTSE100.

We don’t know the full story around Andrew Moss’ departure from Aviva on the back of a hefty protest vote from investors over his pay deal. It may well be that major shareholders made it very clear behind closed doors that they expected to see him go, with the vote acting as a public demonstration that they were serious about private demands. Perhaps the board found the advisory vote to be useful lever to remove an underperformer who had brought some troublesome baggage to the role.

But whatever the truth of the matter, the story exposes a wrinkle in the debate over executive pay.

Investors have been cast in the role of white knights as politicians and boardrooms joust over remuneration. There is a hope that this disparate posse will save us all from sky-high pay deals and the burgeoning gap between corporate leaders and their workers. But the Moss case raises questions over how effective they can be.