By Danny Gazzi, AGM Army member.
16 May 2016
Having recently attended the ShareAction AGM training, this was my first ever AGM. I am particularly interested in the growing problem of inequality in the UK, so I picked Reckitt Benckiser (RB), a company whom ShareAction had suggested for a question on the Living Wage. They provided me with a copy of the correspondence they had had with RB on this subject a year before, as well as an AGM action pack, both of which were very helpful.
Armed with these, my background notes and my typed-out question, I made my way to the Central London location. Outside there was a small demonstration by representatives of the South Korean victims of a humidifier steriliser product. Inside I picked up a printed copy of the RB annual report (so much easier to flick through than a PDF), and made my way into the meeting room with about 150 shareholders and a few journalists.
RB’s CEO, Mr Rakesh Kapoor, presented a comprehensive review of the company’s performance and prospects. RB’s main products are in health, hygiene and the home, and include famous brands such as Nurofen, Scholl, Durex, and Dettol. It has a turnover of £8.8 Billion, employs 35,000 people in 60 countries worldwide, and its share price has been growing faster than most other companies for at least the last 15 years. Mr Kapoor also mentioned his pride that RB had been called one of the most sustainable global companies, and the importance of external recognition in achieving such an accolade. I thought that this boded well for my question, part of which suggested going for accreditation as a Living Wage employer. RB also paid its CEO £23 million last year, which apparently is the second highest amount for a UK based company.
When questions were invited from the floor, I expected that it might be difficult to be called, so I held up my voting card high, and was surprised to be called first. I acknowledged that RB already pays the Living Wage to its directly employed UK staff, and asked whether it would consider: (a) extending the requirement to contractors working on RB’s UK premises, and (b) accrediting as a Living Wage employer. (This involves committing towards progress on contractors’ wages, and has already been achieved by 30 FTSE 100 companies, up from 20 this time last year).
The Chairman passed it to the CEO to answer. He started by saying that there is no agreed international formula for determining what a living wage is for any country. (This is what RB said in their reply to ShareAction last year; however there is some guidance available). He went on to say that in the UK he expected the minimum wage (aka “national living wage”) to be increased until it reached the Living Wage, i.e. that RB would not commit itself to go beyond the legal minimum, which was disappointing.
There were about another 7 questions, some of which expressed disquiet at the CEO’s high salary and at the remuneration committee (it was pointed out that 2 of the 5 members are CEOs at other companies; this is how these salaries are ratchetted upwards, as they approve large increases for each other).
We then proceeded to voting on the various resolutions, and after one and a half hours the meeting was over. We were ushered out the way we had come in, and told that we had 15 minutes to place our voting papers into boxes by the door. From there it was straight into the queue for a buffet lunch. Other shareholders told me that the directors would join us there, so I was looking forward to discussing my question further. I planned to suggest subsequent discussions, for example with the Living Wage Foundation, because asking a question is only a starting point. When they didn’t appear I returned to the room which was now empty; the directors had slipped out by a different route. So I had failed in my main objective. That was a learning experience for the future.
Still at least my question was mentioned in the Guardian’s report of the meeting (although they missed the point about it being contractors who need their conditions improving).
Thanks Danny. To learn more about the AGM Army, get in touch with Aislinn Lambert, Shareholder Activism Coordinator.