Foxtons shareholder rebellion expected at tomorrow’s AGM

There's widespread expectation that Foxtons’ senior management will face sharp criticism at the company’s Annual General Meeting today.

The hottest issue at the AGM - to be held virtually because of the pandemic - is believed to be concern from some major investors at the way £22m has been raised to help the firm face down the challenge of the Coronavirus.

The Daily Mail reports that while Foxtons successfully sold 55m new shares to bolster its finances, the investor advisory group Institutional Shareholder Services has insisted that as the company was not actually running out of cash it should have waited for investor approval at the AGM.

Both ISS and another group - the corporate governance consultancy Glass Lewis - have urged Foxtons investors to oppose resolutions on future share issues at the AGM.

Under recently approved rules for listed firms, companies can raise up to 20 per cent of their market value without a rights issue. 

A month ago Foxtons revealed that it had furloughed 750 staff and asked high paid staff earning over £40,000 to take a 20 per cent pay cut - although a fifth of the staff affected rejected the request.

The company’s target was to reduce its monthly cash outflow from £9m to £3m at a time when income was drastically reduced because of the lockdown and social distancing effectively preventing house sales.

Foxtons also notified HMRC that it will be deferring some PAYE and NIC payments for at least one month.

At the 2019 Foxtons AGM there was a shareholder revolt over another issue - bonuses for the company’s senior management, which were made last year despite what many consider to be the firm’s relatively poor financial performances in recent years.

In a statement last month the company previewed this week’s AGM, saying: “Given recent volatility in the company's share price the Remuneration Committee intends to consider carefully the appropriateness of the share price used to calculate the quantum of the awards arising from the Restricted Share Plan in 2020, and to closely monitor the impact of Covid-19 on the company's remuneration policy (such plan and policy to be proposed to shareholders at the forthcoming AGM) and use its discretion to adjust vesting outcomes if it considers that ‘windfall’ gains have occurred.”