Crest Nicholson Holdings PLC’s shareholders have voted down the directors’ remuneration report over concerns about new profit targets, which make up 50% of the performance condition.
Approximately 107.3 million shareholders voted against the resolution, compared to 77.3 million who approved the proposal.
“Whilst we note that our Remuneration Policy continues to be well supported with a 96% in favour vote, we are disappointed the advisory vote for this year’s remuneration report was not carried,” Crest Nicholson said. “We understand from dialogue with shareholders ahead of the AGM that the main area of concern relates to the profit before tax per share (the “PBT Element”) targets for the 2017-2019 LTIP which makes up 50% of the performance condition.
“As stated previously, the Board expects the rate of profit growth will remain robust but not at levels seen in recent years due to tough comparators, additional investment in land, examining approaches to offsite manufacture and a new division required to support our stretching annual growth targets of 4,000 new homes and £1.4 billion of sales by 2019.
“The PBT Element was agreed by the Remuneration Committee after taking into account those factors, and taking into account the uncertain economic backdrop and the competitive environment in which the Company operates. The remaining 50% of the LTIP is based on targets relating to return on capital employed, ensuring a balance of profitability and capital efficiency for shareholders. The Committee believes that this combination of measures presents a sufficiently stretching LTIP.”