Crest Nicholson ‘disappointed’ amid investor backlash
Over 20% of votes were cast against former chief executive Stephen Stone becoming executive chairman and 9.5% withheld their vote.
Housebuilder Crest Nicholson has said it is “disappointed” after nearly a third of its shareholders failed to back boss Stephen Stone’s appointment as executive chairman.
At its annual general meeting, 20.8% of investor votes were cast against former chief executive Mr Stone taking on the role while another 9.5% withheld their vote amid concerns over his planned length of tenure and executive capacity.
The protest comes despite the group holding “extensive” talks with shareholders ahead of the meeting as part of efforts to win greater backing for the move.
It also follows a major investor revolt over Crest’s pay plans for top bosses last year, when 58% of votes were made against the scheme.
While Mr Stone’s appointment was passed, with 79.2% of votes made in support, the firm pledged to continue talks with shareholders and said there would be an “externally-facilitated” review of the board this year by newly appointed deputy chairman Leslie Van de Walle – the former chief executive of United Biscuits and Rexam.
Crest said: “We are disappointed that over 20% of shareholders were not supportive, and over 9% withheld their votes given our extensive engagement and the additional measures we have put in place.
“However, the board is confident that there will be the necessary separation between the chairman and CEO and, supported by the additional safeguards, will be a healthy feature for the company for the relatively short period of the appointment.”
As well as the appointment of a deputy chairman, Crest said it had put in place other safeguards such as recruiting an extra independent non-executive director, which it claimed took it “beyond the minimum requirements” of the corporate governance code.
The group added it will “continue to review the appropriateness of the arrangements and the length of Mr Stone’s appointment as chairman throughout the year and welcomes the views of shareholders”.
Mr Stone’s appointment on Thursday comes as part of a board reshuffle that will also see chief operating officer Patrick Bergin become chief executive and the departure of former chairman William Rucker.
It is planned that Mr Stone – who had been chief executive since 2005 – will take on the chairmanship on an executive basis until April next year, when he will become non-executive chairman for up to two years.
Crest has insisted the appointment is in the “best interests of the company”, allowing it to retain Mr Stone’s “knowledge and expertise”.
Shareholder advisory groups Pirc and ISS had urged investors to reject this move ahead of the AGM.
But this year’s AGM saw 98.4% of investor votes back Crest’s pay plans, which saw Mr Stone’s total pay deal edge down to £2.2 million in 2017 from £2.3 million in 2016.
He will be paid £300,000 a year as executive chairman, reducing £225,000 when he becomes non-executive chairman.
Crest also updated on trading as it gathered shareholders for the AGM, confirming good sales growth as demand for new homes remains strong and the property market continues to be supported by government policies such as Help to Buy.
The group pointed to full-year forward sales growth of 15% to £620 million.