C&C shareholders reject directors’ pay awards

C&C Group, which manufactures drinks including Tennent’s lager and Magners and Bulmers cider, is experiencing further investor unrest after shareholders voted against its 2024 directors’ remuneration report.

The poll, held at the firm’s annual general meeting (AGM) on 15 August, swung 59.51% against agreement with the board’s pay levels. However, the shareholder vote was advisory, so C&C is not compelled to action any recommendations.

In response to the results, the Ireland-headquartered drinks supplier said: “Over the last year, we have engaged with shareholders about executive remuneration in connection with the new directors’ remuneration policy and 2024 long-term incentive plan, which the board notes were approved by 94.20% and 98.84% of the shareholders at the AGM, respectively.

“We will engage with those shareholders who decided to vote against resolution 5 [relating to the company’s 2024 directors’ remuneration report] during the coming months to understand their concerns.”

When shareholders reject approving directors’ pay awards, concerns usually relate to poorly structured remuneration reports that fail to demonstrate a link between pay and performance, a lack of transparency by companies in reporting their remuneration packages, limited impact of advisory shareholder votes on remuneration reports or excessive exit payments for departing directors.

This latest development from C&C follows activist shareholder Engine Capital recently withdrawing its proposed nominations for two “highly qualified” director candidates following a commitment to “work constructively together”.

The US private investor, which owns just under 5% of C&C’s shares, had aimed to persuade the drinks supplier to accept investment banker Ryan Dublin and Alan Hibben, a former investment banker and private equity executive, onto its board. It wrote an open letter urging the need for boardroom at C&C change after “years of underperformance”.

Engine Capital first took its concerns about the drinks business public in June, publishing a scathing open letter branding the company as a “perennial underperformer” and encouraging it to conduct a strategic review in preparation for a sale.

Later that month, the drinks supplier posted a £96m loss following accounting errors discovered in its previous results, which prompted the then-chief executive Patrick McMahon to stand down from his role.

Just prior to yesterday’s AGM, C&C released a trading update which noted that group earnings had been in line with expectations in the financial year-to-date, “despite the well-documented poor weather in June”.

It said: “We remain confident of achieving our earnings expectations for the full year, reflecting significant growth relative to full-year 2024, and reaffirm our commitment to recommence our second €15m ([£13m] tranche of our share buyback programme from 1 September.”

The group intends to deliver at least €150m (£128m) to shareholders over the next three years, ending in February 2025, 2026 and 2027, through a mix of share buybacks, dividends and special dividends, depending on prevailing circumstances.

C&C also appointed former PwC managing partner Feargal O’Rourke as an independent, non-executive director.

Ralph Findlay, C&C chair and chief executive, said: “Feargal brings valuable expertise to C&C having advised companies on a broad range of corporate, financial and taxation considerations over a long and esteemed career in PwC. We look forward to the contribution he will make to the C&C board in the period ahead as we pursue our strategic, financial and ESG ambitions.”

O’Rourke added: “With its iconic brands and leading distribution platform, I am delighted to join C&C and support the board deliver its ambitious medium and long-term targets.”

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