We work with our Investment Adviser abrdn - one of the world’s largest investment specialists - to invest your money and carry out the activities we talk about below. So, “we” below includes abrdn acting for us, aligned to our approach.
You’re saving in a Pension, Stocks and Shares ISA or Unit Trust / Investment Account that invests your money in our funds. Some of our funds directly invest in bonds and shares which we own on your behalf. Some of our funds invest in a collection of other funds, so we own part of those other funds. Our funds that do that are known as funds of funds.
Owning shares means being a shareholder and getting the opportunity to influence the companies we invest in for you, by voting on what the company does. For both shares and bonds, we can also influence those companies by engaging with them on important issues. In our funds of funds, we work directly with other Fund Managers on their ownership activities.
Being an active owner means working with companies to make sure they put your money to good use. This means considering more than just the financial performance of the company – it’s also about considering the impact they have on the world and working to make that positive. More and more, it means looking at the company’s plans for the future to make sure these are good for people and the planet.
We are moving to investing responsibly across all of our funds. This is shifting our investments from just following different stock market indices, where we don’t pick and choose the companies we invest in, to incorporating investing responsibly into our approach. An important part of this is using active ownership; we need to make sure we are engaging with companies and – if investing in shares – using voting rights to make positive change.
abrdn has a Stewardship policy that sets out how their active ownership activities are carried out with companies. Check it out here.
Engaging with the companies that our funds invest in is hugely important as they work towards bringing about positive change.
Our funds invest in a lot of companies, so we need to engage on the most important issues and the companies that need to change the most to be positive in their impact.
We have a process in place to work with companies to get this done and use common goals with other investors to progress important issues for everyone – like human rights and reducing carbon emissions.
For the funds that invest directly in shares, these come with a right to vote in the decisions companies make in their annual general meeting. We have an approach to voting and this includes using that power along with investor engagement to raise all the most important issues with companies, as well as raising objections on decisions we disagree with.
For the two Virgin Money funds that invest directly in shares, the tables below show part of our voting record during 2022. It lists, for the ten largest holdings in each fund, our votes that differed from the recommendation of the company.
| Position | Company | Matter voted on | Vote direction recommended by Company | Vote direction taken | Reason |
|---|---|---|---|---|---|
| 1 | GSK Plc | Approve Remuneration Report and Policy | For | Against | Our long standing concerns about high levels of vesting for achieving only threshold or median performance in the long term incentive scheme were not addressed by the new remuneration policy. In addition, we were concerned by the significant increase in bonus maximum from 200 percent to 300 percent of salary. |
| 2 | Glencore Plc | Approve Climate Progress Report | For | Against | We have had positive ongoing engagement with Glencore on its climate approach and note improved transparency on its targets and strategy. However, improvement is still needed to increase the robustness of climate linked renumeration and the clarity of targets for the depletion of the company’s thermal coal assets. We recognise that the company has undergone a transition period in relation to its Board, executive team and senior management and believe that it is now well positioned to oversee more robust measures. |
| 3 | Rio Tinto plc | Accept Financial Statements and Statutory Reports | For | Abstain | We are supportive of the work that the company has undertaken in both issuing the Broderick Report, facilitating engagement with its executive team & Chair, and the action plan put in place to address these areas in the report. However, in light of the severity and nature of the report’s findings, we believe that it would not be reflective of our clients’ interests to support the financial statements and statutory reports. On this basis we abstained on this resolution. |
| 4 | RELX Plc | Approve Remuneration Report | For | Against | The long term incentive scheme the company uses allows a high level of vesting for achieving only median performance. |
| 5 | Reckitt Benckiser Group Plc | Approve Remuneration Report and Policy | For | Against | We have had long standing concerns about the high quantum of the Long Term Incentive Policy (LTIP) and its overall structure. |
| 6 | Compass Group Plc | Approve Remuneration Policy | For | Against | We felt that a vote against the remuneration policy is warranted. The maximum opportunity under the LTIP will be increased from 300 percent to 400 percent of salary for the CEO, and from 250 percent to 350 percent of salary for the other Executive Directors. The company's rationale is not considered sufficiently compelling to justify the significant increases. |
| 7 | Ashtead Group plc | Approve Remuneration Report | For | Against | We voted against relevant remuneration related resolutions last year due to the introduction of a one-off additional LTIP award of 350 percent of salary. On this basis it was logical to vote against this resolution this year. We were also aware that despite receiving high levels of dissent on the resolutions last year the company made no material changes to its approach. |
| 8 | SSE Plc | Approve Remuneration Policy | For | Against | The company consulted with us earlier in the year on increasing the annual grant size of its long term incentive scheme from 200 percent of salary to 250 percent of salary. Our view was that this was not an appropriate time to make such an increase in the context of the cost of living crisis which was already developing. |
| 9 | NatWest Group Plc | Re-election of a Director | For | Against | We voted against as we have concerns regarding the number of board mandates held by this director. |
| 10 | InterContinental Hotels Group Plc | Approve Remuneration Report | For | Against | We voted against a number of remuneration related resolutions last year and the year before. It seemed logical that we should vote against this resolution this year as one incumbent executive still receives a pension contribution rate that is not aligned with the broader workforce. |
| Position | Company | Matter voted on | Vote direction recommended by Company | Vote direction taken | Reason |
|---|---|---|---|---|---|
| 1 | Apple Inc | Shareholder Proposal Regarding App Removals | Against | For | We voted in favour of this shareholder proposal as we supported greater transparency from the company regarding the removal of apps from the Apple Store |
| Shareholder Proposal Regarding Report on Effectiveness of Supply Chain Policies on Forced Labour | Against | For | We voted in favour of this shareholder proposal as we support improved human/political rights policies/disclosure. | ||
| 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 Civil Rights Audit | Against | For | We voted in favour of this shareholder proposal as we support a third-party civil-rights audit of the company’s commitments to equality and fairness. | ||
| Shareholder Proposal Regarding Concealment Clauses | Against | For | We voted in favour of this shareholder proposal as better disclosure will help shareholders assess the risks involved in the company's use of concealment clauses. | ||
| 2 | TotalEnergies | Re-election of Director | For | Against | We voted against as we feel that there has been a failure to adopt a science-based Greenhouse Gas emissions reduction target. |
| 3 | Reckitt Benckiser Group Plc | Remuneration Report | For | Against | We voted against this item as the company has failed to incentivise mitigation of material Environmental & Social risks. |
| 4 | Essilorluxottica | 2021 Remuneration of CEO and Deputy CEO & 2022 Remuneration Policy (CEO & Deputy CEO) | For | Against | We voted against as we feel that compensation packages are excessive and there has been insufficient response to shareholder dissent. |
| 5 | UBS Group | Appointment of Auditor | Against | For | We have concerns regarding the length of auditor tenure, which could impede independence. |
| 6 | Grifols | Appointment of Auditor | For | Against | We have concerns regarding the length of auditor tenure, which could impede independence. |
| Remuneration Report | For | Against | We voted against this item as the company has failed to incentivise mitigation of material Environmental & Social risks. | ||
| Authority to Set Extraordinary General Meeting Notice Period at 15 days | For | Against | We voted against this item as we believe that a shortened notice period could disenfranchise shareholders | ||
| 7 | Microsoft Corporation | Advisory Vote to Ratify Named Executive Officers' Compensation | For | Against | We have concerns regarding the link between pay and performance. Time-based awards to any one individual are worth $5m or more in the preceding year. Performance-based awards have a performance period of less than three years. |
| Appointment of Auditor | For | Against | We have concerns regarding the length of auditor tenure, which could impede independence. | ||
| Report on Tax Transparency | Against | For | We voted in favour of this shareholder proposal as we support greater transparency on tax from the companies in which we invest. Tax transparency can illuminate material risks to profitability and reputation. Microsoft’s business lines and global operations leave it exposed to tax reform and the requested report would support the Company to adopt disclosures that keep it ahead of the regulatory curve. | ||
| 8 | International Flavours and Fragrances | Election of named Director | For | Against | We voted against as we felt that this director already serves on too many boards. |
| Appointment of Auditor | For | Against | We have concerns regarding the length of auditor tenure, which could impede independence. | ||
| Advisory Vote on Executive Compensation | For | Against | We voted against this item as the company has failed to incentivise mitigation of material Environmental & Social risks. | ||
| 9 | Goodman Group | Re-elect named Director of Goodman Limited | For | Against | We voted against this re-election as the director is already an executive director (CEO America) and thus not independent. We have engaged with the company about this since last year’s vote and whilst we recognise that this was legacy driven rather than intentional, we are of the view that at some point this needs to change. We think increasing the level of independence on the board is ultimately more beneficial to shareholders now than having additional executives on the board. |
| Approve Remuneration Report | For | Against | We abstained on the Remuneration Report last year on balance given the solid alignment of the remuneration framework but with reservations given the quantum of performance rights. We did raise this in subsequent engagement and whilst we have indeed seen improvement this year, the company appears to continue to adopt an economic value calculation to determine the quantum of rights. We are of the view that the total remuneration package remains excessive for a property business that is arguably less complex to operate and to risk manage when compared to other global businesses. | ||
| Approve Issuance of Performance Rights to named Directors | For | Against | We voted against as the quantum of rights granted is considered excessive given it is calculated based on an economic value being substantially below fair value. | ||
| Approve the Increase in Non-Executive Directors' Fee Pool | For | Against | The rationale for increase is sound and we do agree that an increase is needed however the 60% increase appears too much without a further breakdown of fees. | ||
| 10 | Vivendi | 2021 Remuneration Report | For | Against | We voted against this as we believe there had been a poor response to shareholder dissent. |
| 2021 Remuneration of Board members | For | Against | We felt that there was a poor overall design, increase was excessive and there had been poor response to shareholder dissent | ||
| 2021 Remuneration of Management 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. | ||
| 2022 Remuneration Policy (Supervisory Board) | 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. | ||
| Authorise Public Share Buyback Offer | For | Against | We voted against as we did not believe that this proposal was in shareholders’ best interests. |
There are a few other areas of active ownership that we consider and these help us to manage your investments.
Conflicts of interest based on ownership influence
That means keeping an eye out for things that we do that might stop us from making the most of this on your behalf.
Sweating the big stuff
We work with other investors on the big things that companies need to do to build positive change and a brighter future.
Lending out
A couple of our funds can lend out their investments, which also includes ownership rights. We make sure this is only in small amounts, for a short time, and in a way that doesn’t impact on being an active owner for you.