If you’re saving in a pension, stocks and share ISA or unit trust you’ll be holding money in one of our funds. Most of these funds buy and sell shares in companies on stock markets. Owning shares in a company means you’re a part-owner of that company.
We use a Fund Manager to do this buying and selling. With our Climate Change Fund the Fund Manager picks the companies they buy and sell. With our other funds, which track a stock market index (like the FTSE All-Share Index), the Fund Manager doesn’t pick and choose individual companies themselves – they just follow the index.
Whichever way the buying and selling is done, owning shares in a company brings with it responsibilities – to that company’s customers and employees, the environment, and society in general.
Our Fund Managers can engage directly with these companies and vote as a shareholder on behalf of Virgin Money and the fund you’re invested in. What they do and how they vote is based on a set of principles (called their Engagement Policy) which we check are aligned with our principles and are in the best interests of the fund and you – the customers who invest in our funds.
For our Climate Change Fund, the Fund Manager is MAN GLG. PDF link opens in a new window For our other funds, it’s abrdn. PDF link opens in a new window Select the company name to read their policies for how they invest and engage with companies.
We’ll also show how it’s working for real below. For example, we’ll share how our Fund Manager votes on significant shareholder issues where the fund is a sizeable shareholder in that company. This list will be updated each year.
With regard to the two Virgin Money funds that invest directly in the shares of companies, the tables below show some of the votes cast during 2021 that were contrary to the recommendation of the Company concerned. The tables show votes ranked by the ten largest companies in each fund where contrary votes were made.
| Position | Company | Matter voted on | Vote direction recommended by Company | Vote direction taken | Reason |
|---|---|---|---|---|---|
| 1 | Astrazeneca | Approve Remuneration Policy and Amend Performance Share Plan | For | Against | For the second consecutive year, variable pay is being significantly increased. While the Company's recent strong run of performance is acknowledged, it is highlighted that the CEO's total variable pay opportunity will have increased from 650 percent of salary to 900 percent of salary over the course of two years. Specific to this AGM, a policy vote to increase the annual LTIP opportunity from 550 percent of salary to 650 percent of salary is proposed; the Company is also using existing headroom within the current policy to increase the CEO's bonus maximum from 200 percent of salary to 250 percent. The rationale for these changes is not considered to be sufficiently compelling to warrant bringing forward a remuneration policy vote at this AGM, the current policy having been approved by shareholders for a three-year term at the 2020 AGM. |
| 2 | GlaxoSmithKline Plc | Approve Remuneration Report | For | Against | The long term incentive scheme used by the company allows a high level of vesting for achieving median/threshold levels of performance. |
| 3 | Rio Tinto plc | Accept Financial Statements and Statutory Reports | For | Against | We voted against this resolution to convey our disappointment to the company about the incident at Juukan Gorge. |
| Approve Remuneration Report for both UK and Australian Law Purposes | For | Against | While we were aware that the company had applied some reductions to bonus outcome and LTIP vesting in relation to the incident at Juukan Gorge. We nevertheless noticed that the CEO total remuneration for the year, following these reductions, was actually still significantly higher than it was in the previous year. This did not look or feel right to us. | ||
| 4 | Reckitt Benckiser Group Plc | Approve Remuneration Report | For | Against | We have had long standing concerns about the high quantum and LTIP structure. |
| 5 | RELX Plc | Approve Remuneration Report | For | Against | The long term incentive used by the company allows a high level of vesting for achieving only median/threshold performance. |
| 6 | London Stock Exchange Group plc | Approve Remuneration Report | For | Against | We voted against this resolution as the CEO was awarded a significant salary increase of 25% in light of the Refinitiv acquisition, which is not considered sufficiently merited, notwithstanding the strategic benefits of the transaction.- The new CFO's base salary and maximum LTIP opportunity were set at higher levels than that of her predecessor, and no rationale for the increases has been provided by the Company in the annual report. |
| 7 | Ashtead Group plc | Approve Remuneration Report | For | Against | The CFO was awarded a significant salary rise. During consultation we conveyed our view that such large rises should be staggered over a couple of years to provide both an incentive and reward for the long term. |
| Approve Remuneration Policy | For | Against | The company sought to amend its remuneration policy to facilitate a significant additional one-off LTIP award of 350 percent of salary. The award would be in tandem with the normal LTIP award of 250 percent of salary. During consultation we explained that our voting policy does not support one-off awards but the company decided to proceed anyway. | ||
| 8 | Imperial Brands plc | Accept Financial Statements and Statutory Reports | For | Against | The board comprises only 20 percent women. This falls short of the 33 percent expected from the Hampton Alexander review by end 2020. We would normally vote against the re-election of the Nomination Committee Chair, Therese Esperdy, in this situation. However, given the general uncertainty surrounding COVID 19 we felt reluctant to do this so shall vote against the report and accounts resolution this year. We also felt it would be counterproductive to vote against the re-election of Ms Esperdy as she is one of the two women on the board. |
| Approve Remuneration Report | For | Against | The company has decided to reduce the incumbent executive director pension contribution to the staff rate by October 2023. This is not consistent with the Investment Association statement that asks that this be done by 2022. The delay to October 2023 is not in the spirit of the statement. We were also aware that the newly appointed CEO received a salary on appointment 12.7% higher than his predecessor who had been in the role for 10 years. We might reasonably have expected his salary to rise over next couple of years thus creating an incentive and reward for progression and good performance in the role. | ||
| 9 | Halma plc | Approve Remuneration Policy | For | Against | The maximum limits of the variable pay package are being significantly increased for all Executive Directors. In particular, it is highlighted that the CEO's annual bonus opportunity will increase from 150 percent to 200 percent of salary, and the LTIP from 200 percent to 300 percent of salary. Together with other salary increases, this represents a material uplift to the total remuneration package. |
| 10 | Next plc | Approve Remuneration Report | For | Against | We had concerns regarding the misalignment of executive pensions with the wider workforce. |
| Position | Company | Matter voted on | Vote direction recommended by Company | Vote direction taken | Reason |
|---|---|---|---|---|---|
| 1 | Astrazeneca plc | Approve Remuneration Policy | For | Against | We believe that the increase proposed is excessive. |
| AstraZeneca Performance Share Plan 2020 | For | Against | We believe that the increase proposed is excessive. | ||
| 2 | Kering | Approve Remuneration Policy | For | Against | We were concerned with equity awards made to controlling shareholder (Chair and CEO) and the overall poor design of the policy. |
| 3 | ASML Holding NV | Approve Remuneration Report | For | Against | We were uncomfortable that upward discretion in remuneration had been exercised. |
| 4 | Credit Agricole S.A. | Re-election of Directors | For | Against | We voted against this as the two directors up for re-election were on the nominating committee. |
| 5 | Siemens AG | Shareholder proposal to amend articles of association to allow shareholders to ask questions at virtual general meetings | Against | For | We were in favour of the shareholder proposal as it was in the best interest of shareholders. |
| 6 | Vestas Wind Systems | Appointment of Auditor | For | Against | We had concerns about excessive auditor tenure. |
| 7 | EDP-Energias DE Portugal S.A. | Election of General and Supervisory Board | For | Against | We voted against this as insufficient information had been provided prior to the vote. |
| 8 | Vivendi | 2020 Remuneration Report | For | Against | We believe there had been a poor response to shareholder dissent. |
| 2020 Remuneration of Supervisory Board Chair | For | Against | We did not agree that Non-executive participation should be linked to performance, in addition, there was a poor response to shareholder dissent. | ||
| 2020 Remuneration of a number of board members | For | Against | We felt that there was a poor overall design, poor overall compensation disclosure and poor response to shareholder dissent. | ||
| 2021 Remuneration Policy (Supervisory Board) | For | Against | We did not agree that NEDs may participate in the executive bonus plan. | ||
| 2021 Remuneration Policy (Management Board Chair and board members) | For | Against | We felt that proposed increases were excessive as well as their being poor overall design, poor overall compensation disclosure and a poor response to shareholder dissent. | ||
| Authorize Public Share Buyback Offer | For | Against | We did not believe that the proposed amendment was in the best interests of shareholders. | ||
| Authority to Issue Performance Shares and Restricted Shares | For | Against | We voted against due to poor overall compensation disclosure and poor overall design. | ||
| 9 | Lloyds Banking Group plc | Remuneration Report | For | Against | We felt that there was poor disclosure surrounding performance adjustments. |
| 10 | Amadeus IT Group S.A. | Remuneration Report | For | Against | We voted against this item as we felt that there were poorly justified adjustments relating to COVID-19. |
| Others of interest | Nike Inc. | Shareholder Proposal Regarding Political Contributions and Expenditures Report | Against | For | We voted in favour of the shareholder proposal to review/limit political spending as we felt it was in the best interest of shareholders. |
| Shareholder Proposal Regarding Human Rights Impact Assessment | Against | For | We voted in favour of the shareholder proposal for improved human/political rights policies/disclosure as we felt it was in the best interest of shareholders. | ||
| Shareholder Proposal Regarding Median Gender and Racial Pay Equity Report | Against | For | Enhanced disclosure would allow shareholders a better understanding of how the issue of pay equity was being managed and overseen. | ||
| Shareholder Proposal Regarding Diversity and Inclusion Report | Against | For | Enhanced disclosure would allow shareholders a better understanding of how the issue of diversity was being managed and overseen. |