How to prepare for executive pay questions at your AGM

When I was training with Toastmasters International to become a public speaker on Responsible Reward, one assignment we were given was ‘Speaking under fire’. The brief was to ‘dispel the hostility and convince the audience that your side has some merit, not necessarily to change their mind’.

For this task, I chose to role-play an AGM. I talked about executive pay while my fellow mentees pretended to be an audience of unruly investors. Despite their tough questions, my mentor’s feedback on my performance was pretty good. I guess I’d learnt from past experience!

For firms whose end of year is December, May is usually a busy time with AGMs. If you haven’t had yours yet, here are my top ten tips on how to prepare:

1. Compile a comprehensive presentation. Include a reminder of your current executive pay offering and what you are proposing to change this year, why, when, and for whom. Take the audience through your story.

2. Make sure the pack contains the latest information. With input from different teams, it’s easy to get confused about version control and end up presenting old data.

3. Check who your main investors are and their ownership percentage. But be mindful that small investors can be pretty opinionated and vocal too!

4. Remind yourself what investors thought of your proposals last year. They may bring up the same points again or ask for an update, so you’ll need to have an answer. But you can also show you’re switched on and address those points upfront.

5. Get familiar with new guidelines. Have your main investors issued executive pay guidelines this year that you need to be aware of? What points will they accept easily? Which ones will be more contentious? How will you answer them?

6. Please the proxies. Have you collated their views and expectations on executive pay? What type of questions did they ask during the engagement process? Some will compare you to a set of firms that they consider your peers. If you disagree with their list of comparators, let them know and suggest your own. Explain why your suggestions are more suitable and they may well add them to their report.

7. Prepare a Q&A of the questions you’re most likely to receive and send it around before the meeting. This will save time on the day.

8. Rehearse internally. Make sure you and your Remuneration Committee chair are fully briefed on the content of your presentation and confident on the delivery. Agree in advance who will present which section and who will answer which questions.

9. Don’t make it up on the spot in the unlikely event that you don’t know the answer to a question. Explain that this is still work in progress or offer to return to the point once you have the information to hand.

10. Accept that you can’t prepare for everything. As we saw last week at the Aviva plc AGM, a small number of investors can make unwelcome and derogatory comments. This can derail the flow of the meeting and upset attendees and the wider online community.

I’ve received a growing number of enquiries from corporate governance and company secretaries who want to learn about executive pay. Some are based in the UK; others are overseas and following the UK Corporate Governance code for best practices. I take them through the preparation of the documentation they need and the difficult questions investors may ask. Together, we showcase the great work they’re already doing.

If you’re not a Reward professional who is expected to understand the intricacies of executive pay in your organisation, my service can help you bridge that gap.

I’ve written and compiled many executive pay proposals and disclosures, and prepared remuneration reports for AGMs. I know how to spot good practices as well as pitfalls.

As a Reward practitioner for over 30 years, I have worked with private and publicly listed organisations across sectors and geographies. Check out my client list and their testimonials.

My unique area of focus is Responsible Reward: how to leverage the power of remuneration (base pay, incentives, benefits and pensions) to support and achieve the UN SDGs. I train Reward, investment and corporate governance professionals on this topic through their own lens.

So, book your catch up call with me today to discuss your needs in more detail.