Source: Company data, Catalyst Fund Managers

During the year, an increased focus was placed on the remuneration policy and its implementation in the listed property sector as shareholders evaluate whether management teams are equitably compensated considering the significant losses shareholders suffered. In this regard, each circumstance is unique and should be evaluated on a case-by-case basis; however, it is important that the overall objective remains to provide compensation that is sufficient to attract, retain and motivate executives.

In the above graph, we analyse the proportion of shareholder votes that were cast in favour of the remuneration policy and its implementation report for 31 listed property companies based on their most recent AGM results. Both resolutions are non-binding; however, if shareholders exercising at least 25% of the voting rights vote against either of the resolutions then the company is required to engage with dissenting shareholders. In the sample above, 2/3rd of companies received 75% approval for their remuneration policy while this number declined to 61% for the implementation report. Executive remuneration has and will continue to be a hotly debated topic and we expect going forward companies are likely to actively engage more readily with shareholders beforehand to address their concerns in a timely manner.

At Catalyst Fund Managers, we endeavour to provide sustainable portfolio solutions. ESG policies and procedures form a central part of this process. Environmental, social and corporate governance (ESG) issues affect the long-term performance of these companies, as well as align investors with the broader objectives of society in which the company operates or has direct physical assets.