Schroders outgoing chief executive Michael Dobson has been elected as chairman of the board, but around 30 per cent of external shareholders voted against the move.
A vote at the asset manager’s annual general meeting today saw 85 per cent of shareholders vote in favour of the appointment, with just 14.9 per cent voting against.
However, a significant 47 per cent shareholding is held by the Schroders family, who support Dobson’s appointment, meaning around 30 per cent of external shareholders voted against the move.
Dobson, who has been chief executive since 2001, announced plans to step down last month, with head of investment Peter Harrison replacing him from this month. In the move it was announced that Dobson would become chairman of the board, breaching a number of corporate governance principles.
Ahead of the vote shareholders Hermes Investment Management, Old Mutual Global Investors, Royal London Asset Management, ISS and Glass Lewis all recommended voting against the proposal.
However, these shareholders have small portions of Schroders’ shares. Hermes has 0.7 per cent of the company, while Royal London Asset Management holds 0.09 per cent and OMGi holds 0.39 per cent. ISS and Glass Lewis are thought to influence around 20 per cent of shareholders.
Hans-Christoph Hirt, executive director at Hermes EOS, the engagement division at the asset manager, told Fund Strategy: “It’s very rare for us to go out in public and declare how we vote. We thought it was such an exceptional principle here that is being breached we decided to go out and explain our voting decision.”
Hermes also said it was voting against the reappointment of the senior independent director who led the chair succession process, Lord Howard of Penrith.
The AGM vote saw 5 per cent of shareholders vote against Lord Howard’s re-election, with 11.8 per cent of independent shareholders voting against the move.
Philip Howard, senior independent director at Schroders, says: “The company notes that more than 85 per cent of shareholders who voted supported the re-election of Michael Dobson. As I have explained previously, the board, before proposing Mr Dobson as chairman, consulted with its major shareholders and this engagement will continue.
“The board expects to appoint two new independent non-executive directors by the end of this year at which time the board will comprise a majority of independent directors.”