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 Aberdeen Standard Investments. 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 2019 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 | Royal Dutch Shell | Approve Remuneration Report | For | Against | Concerns about linkage between pay and performance. |
| 2 | GlaxoSmithKline Plc | Approve Remuneration Report | For | Against | Concerns about linkage between pay and performance. There were concerns that the long term incentive still vests generously for achieving only threshold or median performance. In addition there were concerns that generous salary rises increase total pay significantly. |
| 3 | Prudential Plc | Re-election of Director | For | Against | Concerns about board structure and diversity. There are only two female directors on this board of twelve directors. |
| 4 | Reckitt Benckiser Group Plc | Approve Remuneration Report | For | Against | Concerns about linkage between pay and performance. There are long standing concerns about high pay quantum and Long Term Incentive Plan structure. |
| Reckitt Benckiser Group Plc | Re-election of Director | For | Against | Voted against the members of the Remuneration Committee of this company to underline the long standing concerns. | |
| 5 | BHP Group | Amend Constitution of BHP Group Limited | Against | For | Voted for a shareholder proposal as it encourages an enhanced environmental approach. Proposal was supported due to concerns about, effectiveness of BHP’s governance over the industry associations where they are a major funder, advocacy on climate change and energy policy being misaligned with BHPs own pro Paris positioning. |
| BHP Group | Approve suspension of memberships of Industry Associations that are Involved in Lobbying inconsistent with the goals of the Paris Agreement | Against | For | Voted for a shareholder proposal as it encourages an enhanced environmental approach. Proposal was supported due to concerns about, effectiveness of BHP’s governance over the industry associations where they are a major funder, advocacy on climate change and energy policy being misaligned with BHPs own pro Paris positioning. | |
| 6 | RELX Plc | Approve Remuneration Report | For | Against | Concerns about linkage between pay and performance. |
| 7 | Experian Plc | Approve Remuneration Report | For | Against | Concerns about linkage between pay and performance. There was consultation on some changes to its incentive scheme structures but no consultation on the new performance targets. On reading the annual report it was disappointing to learn that the targets appeared undemanding. |
| Experian Plc | Re-election of Directors | For | Against | On balance the justification provided for the exit payment made to a director was accepted, however, it was felt that the company should have dealt with a service contract issue sooner. As such, it was considered appropriate to signal disappointment by voting against the members of the Remuneration Committee rather than the Remuneration Report. | |
| 8 | Standard Chartered Plc | Approve Remuneration Report | For | Against | Concerns about linkage between pay and performance. There were concerns that some long term incentive targets did not reflect the guidance of the company management. |
| Standard Chartered Plc | Approve Remuneration Report | For | Against | Concerns about linkage between pay and performance. There were concerns that some pension arrangements for executives do not reflect trends to reduce these. | |
| 9 | Ferguson | Approve Remuneration Report | For | Against | Concerns about linkage between pay and performance. There were concerns about significant increases to variable pay. |
| Ferguson | Amend Long Term Incentive Plan 2019 | For | Against | Concerns about linkage between pay and performance. There were concerns about significant increases to variable pay. | |
| 10 | Informa | Approve Remuneration Report | For | Against | Concerns about linkage between pay and performance. |
| Informa | Re-election of Directors | For | Against | There were concerns regarding the number of board mandates held by two directors and the tenure of another director. |
| Position | Company | Matter voted on | Vote direction recommended by Company | Vote direction taken | Reason |
|---|---|---|---|---|---|
| 1 | Kering | Remuneration policy and remuneration of 2 Directors | For | Against | It was felt that there was a poor response to concerns raised by shareholders and the overall design of the policy was equally poor. |
| 2 | Vivendi | Remuneration of CEO | For | Against | A significant increase in fixed pay was being proposed by the company and it was felt there was poor responsiveness to shareholder concern. |
| 3 | NIKE | Ratification of Auditor | For | Against | It was felt that there was excessive auditor tenure. |
| 4 | Ipsen | Remuneration of CEO | For | Against | It was felt that there was poor responsiveness to shareholder concerns and a short performance period for Long Term Incentive Plan. |
| Ipsen | Remuneration Policy (CEO and Management Board Members) | For | Against | It was felt that the performance period for the Long Term Incentive Plan was too short. | |
| Ipsen | Authority to increase capital in case of exchange offer and to issue shares through private placement | For | Against | Potential dilution exceeds recommended threshold. | |
| Ipsen | Authority to Grant Stock Options | For | Against | Poor overall compensation disclosure. | |
| 5 | Vestas Wind System | Appointment of auditor | For | Against | Concerns about length of tenure being too long. |
| 6 | Vinci | Appointment of auditor | For | Against | Concerns about length of tenure being too long. |
| 7 | Kion Group | Election of Director | For | Against | Board is not sufficiently independent. |
| 8 | EDP | Election of Chair of the Board of General Meeting | For | Against | Nominee sits on more than two public company boards while being an executive of a public company or the nominee sits on more than five public company boards. |
| 9 | Hexagon AB | Election of Directors | For | Against | Fewer than three members on remuneration committee. |
| Hexagon AB | Remuneration Guidelines | For | Against | Unexplained 23% salary increase. | |
| 10 | Swiss RE | Appointment of auditor | For | Against | Concerns about length of tenure being too long. |