Alliance Trust ‘out of order’ for biased AGM voting form
Alliance Trust has been told it is “out of order” for sending out partisan voting forms to shareholders ahead of its annual general meeting showdown.
The trust, which is battling a bid by its biggest shareholder to add three new non-executive directors to its board, has sent out proxy voting letters, with the boxes to vote against the nominees highlighted.
When the activist shareholder pushing the nominations, Elliott Advisors, sent out its own proxy forms to counter the Alliance Trust move, the trust placed a warning on its website telling investors to disregard them.
But Alliance Trust’s hardball tactics may have backfired as one adviser said they were “dictatorial”, which may encourage more investors to back the nominations at the April 29 AGM.
Adviser Kevin Morgan, managing director at Consilium Financial Planning, said the “apparent dictatorial stance” by the existing board was “somewhat concerning”.
“My immediate thought is ‘What has the board got to hide?’,” he said.
“If I were to vote it would be for the appointment of the three non-executives. This process doesn’t sit well with me.”
East Anglia-based Carl Lamb, managing director of Almary Green Investments, said he thought the way the form was designed was “out of order”, and suggested “people should just be presented with the facts so they can make their own mind up”.
Roger Lawson, deputy chairman of ShareSoc, an independent firm supporting private investors, said he felt it was “very bad practice for a public company”.
He added: “It is, of course, not unreasonable for directors to give their recommendations as to which way shareholders should vote, and the reasons for those recommendations.
“But designing the proxy voting form in this way is unreasonable, and in essence immoral. It is attempting to rig the vote to some extent by introducing a bias in favour of a selection, while prompting investors not to think about it.”
Rebecca Thorpe, who leads the projects team at financial regulatory advisory consultancy Bovill, said she had “some sympathy” with the Alliance Trust board.
“It does seem a very blunt tool to get the message across using the actual form that investors have to fill in, but at the same time it might be the only thing which investors will read,” she said.
A spokesperson for Alliance Trust said: “It is standard practice to issue a proxy form in such a manner, and indeed Elliott has done so in its communication to shareholders.
“Many other proxy cards are formatted like this, such as Electra or Petroceltic. These documents were submitted to the UK Listing Authority (UKLA) and no issues were raised.”
The spokesperson also said other listed businesses had presented their proxy voting forms in a similar way.
