Magazine publisher Future has seen proposals to award executives and other staff bonuses worth up to £95m voted down by shareholders – the largest in a series of rebellions over executive bonuses faced by the company since 2019.
At their annual general meeting (AGM), held on Thursday, shareholders voted 55% to 45% against the proposals that would have seen Future chief executive Zillah Byng-Thorne earn as much as £40m (with the rest of the total potential bonus pot spread amongst other staff).
While the vote was only advisory, it has forced the publisher behind titles such as The Week, Country Life and Tech Radar into a sit-down with unhappy investors to discuss the future of the company’s Value Creation Plan (VCP).
The VCP is a system of performance-related bonuses in the company put in place a year ago that was triggered if the total return to shareholders (share price growth and/or dividends) tops 10%, provided the share price exceeds £19.42.
On the morning of the AGM (yesterday) the Future share price was £33.44, although at time of writing it had droped to £30.80.
While the VCP has the potential to award the chief executive a £40m bonus, that is the absolute maximum.
Byng-Thorne previously received an increase in her base salary to £575,000 in 2020, after she led the company to record profits.
Since then, Future has seen continued record performances during the pandemic – with the its share price more than doubling during 2021 and the company doubling its pre-tax profits to £57m in the six months to the end of March 2021. Less than a decade ago, the company was at risk of going bankrupt, with the entire business valued at around £30m.
A large part of the company’s success has been an effective strategy of pivoting brands to becoming digital titles, funded by advertising and e-commerce revenues.
At last year’s AGM over a third of shareholders voted against both the company’s pay policy and its Value Creation Plan over fears it would lead to excessive payouts as the company continued to grow. Byng-Thorne was paid some £8.8m last year and has been paid almost £34m over the last five years.
Another major point of contention that led to the vote flipping against Future’s board was the six-figure exit package for former CFO Rachel Addison.
In a statement alongside the results of the AGM, the board of Future said: “The approval of the directors’ report on remuneration, did not pass. As a result, the board will initiate a new consultation process with shareholders regarding the matter.
“The board remains of the view that the all-employee Value Creation Plan, which was approved by shareholders at the 2021 AGM, incentivises and rewards the whole Future workforce and supports the long-term success of the business, and the continued creation of sustainable long-term shareholder value. The plan is directly aligned to shareholder interests and will only vest if the company delivers exceptional performance.”
A spokesperson told Press Gazette that the company’s view was that the bonuses received so far under the scheme were commensurate to its massive growth and that because the payment to former-CFO Addison had already been made, it was not something that could be amended.
Future stressed that the bonus plan benefits employees across the company, citing a £10m bonus paid across the company’s workforce last year as a result of the company’s performance.