Major listed UK companies will be gearing up to host their annual general meetings between April and May. During these events shareholders are given a chance to question the board of directors over financial results and future strategy.
In recent years, shareholders and activists have used AGMs to voice dissent, vote against management decisions or push for drastic overhauls in how the company is run. Between the free buffet and disruptions from demonstrators, discussions can get heated. This year, set against a rapidly shifting geopolitical backdrop, looks to be particularly divisive.
President Donald Trump’s return to the White House has transformed the corporate landscape since last year’s AGM season. His stance on “illegal DEI” and rallying cries to “drill, baby, drill” has prompted companies to start dismantling diversity policies and turn their backs on climate resolutions. In the UK, those with ties to the US market have found themselves caught in the crossfire. This, at a time when the London stock market continues to fight for its slipping status and shareholder activism is on the rise.
Here, experts share some of the big topics and developments expected to dominate AGMs in the coming months.
DEI disputes
An emerging battleground this AGM season will be around diversity, equity and inclusion (DEI) policies. The controversy surrounding diversity issues in the US has prompted several global investment managers, including State Street, BlackRock and Vanguard, to drop DEI from their proxy voting policies when it comes to board diversity.
“There is potential for UK firms to follow US trends,” says Scott Morris, a senior advisor at StoneTurn, a global professional services firm. GSK, a FTSE 100 pharma company, has halted its diversity activities, claiming that it is obliged to under Trump’s executive orders and because the US is its largest market. This is despite being a British company listed on the London Stock Exchange. The British advertising giant WPP has also cut the phrase “diversity, equity and inclusion” from its annual report, having had 20 mentions in the previous year’s report.
This year’s AGMs could see shareholders leverage their influence to hold companies accountable when it comes to tackling workplace inequality, Morris adds. Apple’s shareholders have already voted down a proposal to curb the company’s diversity efforts.
“Boards must carefully assess investor sentiment on DEI matters, particularly in light of recent shifts in the US,” says David Gracie, director and co-owner at Indigo, a governance advisory firm. “A key question is whether shareholders will take a stronger stance against the board of companies failing to meet UK diversity targets and whether large-scale international investors such as Blackrock and State Street Global Advisors adopt a global house view on DEI matters or remain focused on local market expectations.”
High pay under scrutiny
Boards are expected to face heat over executive pay this AGM season. A raft of pay rises have been announced for UK bosses in recent weeks, with claims from these companies that they need to remain competitive with US rivals. The CEO of Intercontinental Hotels Group could see his pay almost triple to £20.6m, the Guardian reports. AstraZeneca, the UK drugmaker, suffered a shareholder rebellion against an £18.7m pay packet for its CEO in 2024. Despite this, his annual pay could increase from £14.7m last year to £25m this year under the company’s latest remuneration policy.
This follows a recent decision by the Investment Association’s (IA) Principles of Remuneration and UK Corporate Governance code, which grants listed companies more scope for higher executive-pay packages.
“The revised principles will be particularly important for those companies who are due to put forward a new directors’ remuneration policy at their next AGM,” says Gracie. “The opportunity for companies to reconsider their approach to pay is likely to attract even more investors and press scrutiny. The real test will be whether companies choose to push the boundaries on pay this year and how investors and other stakeholders will react.”
According to Gracie, any justification for executive pay must focus on implementing a stronger link between performance and remuneration. Instead of using market benchmarking as the primary justification for remuneration increases, he says, companies will be expected to provide clear rationale for salary decisions based on the talent markets they are recruiting from.
“Excessive bonus payouts that do not align with long-term shareholder value will result in adverse recommendations,” he says. “Boards must carefully balance competitive remuneration with governance expectations to avoid misalignment with shareholder priorities.”
Tensions rise over climate policies
Responsible investors face an uphill battle this AGM season as climate resolutions become less prominent due to a de-prioritisation of sustainability-related matters by investors. Last year, for the first time, ESG shareholder resolutions were driven by anti-ESG proponents, according to a report by ShareAction, a responsible-investment campaign group. It found just 1.4% of resolutions tackling environmental and social issues received majority support.
The sentiment appears to be growing stronger ahead of this year’s voting season, says Morris: “In recent months, large investors have retreated from climate policies, fuelled by a politicised debate about ESG in the US. People tend to find their moral compass when it is trendy and enthusiasm appears to be waning.”
HSBC has changed targets in executives’ pay plans, while Aviva Investors – the investment arm of Britain’s biggest insurer – has abandoned its strategy to sell stakes in companies that fail to restrict their carbon emissions. BP has decided not to include a vote on its climate plan at its upcoming AGM, despite investor requests.
“Tensions are increasing between UK investors and US asset managers,” says Jamie Hanley, a partner at law firm Labaton Keller Sucharow. Some UK investors are pushing back against this ESG backlash among the biggest US asset managers. Sarasin & Partners LLP recently divested from the oil and gas company Equinor, citing a failure to align with Paris Climate goals, while the People’s Pension has pulled £28bn from State Street over ESG goals.
In Hanley’s view, divesting is not the most effective approach shareholders can take. It could result in consolidation of ownership into the hands of the remaining investors who are potentially less concerned with ESG considerations. “I believe that it is even more important for institutional investors to hold bad corporate behaviour to account and to right ESG wrongs,” he says.
With so many issues up for debate, this AGM season is shaping up to be a tough one for boards.
Major listed UK companies will be gearing up to host their annual general meetings between April and May. During these events shareholders are given a chance to question the board of directors over financial results and future strategy.
In recent years, shareholders and activists have used AGMs to voice dissent, vote against management decisions or push for drastic overhauls in how the company is run. Between the free buffet and disruptions from demonstrators, discussions can get heated. This year, set against a rapidly shifting geopolitical backdrop, looks to be particularly divisive.
President Donald Trump’s return to the White House has transformed the corporate landscape since last year's AGM season. His stance on "illegal DEI” and rallying cries to “drill, baby, drill” has prompted companies to start dismantling diversity policies and turn their backs on climate resolutions. In the UK, those with ties to the US market have found themselves caught in the crossfire. This, at a time when the London stock market continues to fight for its slipping status and shareholder activism is on the rise.
