 Press extract
The shareholders have voted down its directors' remuneration report after the company slumped to a loss of almost £120m during its latest financial year.
Over 57% of shareholders in the Chester-headquartered business voted against the report at its annual general meeting.
The report sets out how much the executive team will be paid in base salary and bonuses over its new financial year.
According to the group's annual report, the executive directors and board decided not to receive a salary increase for its current financial year after "taking into account the financial performance of the business."
Chief executive Chris Clark was paid a total of £637,000 in the year to March 31, 2023, down from £1.3m in 2022.
The vote came after GB Group said its losses were due to an annual impairment review which resulted in a £122.2m charge against its identity business, which is formed of its IDology and Acuant acquisitions.
In its prior financial year, GB Group had achieved a pre-tax profit of £21.7m.
For the 12 months to March 31, 2023, the group's revenue increased from £242.5m to £278.8m.
A GB Group statement issued to the London Stock Exchange said: "The board notes that the advisory vote on the directors' remuneration report did not receive the required majority number of votes to pass.
"Prior to the AGM the remuneration committee conducted an extensive consultation with the company's largest shareholders regarding the directors' remuneration report.
"The remuneration committee values the feedback they have received on the company's remuneration arrangements and will continue to engage constructively with shareholders."
Shares in the group have fallen by more than 4% today (Thursday, July 20) to 251p each.
In the report, the group said: "GBG’s remuneration policy is fundamental to the delivery of the group’s ongoing strategic objectives and provides key incentives and support for sustainable long term value creation.
"We firmly believe that our remuneration policy effectively rewards and incentivises our executive team and senior management.
"It also makes sure we provide fair pay, as well as supporting and promoting all our team members’ wellbeing and engagement.
"We align our remuneration with the group’s strategic aims and consider how we distribute incentives across all GBG team members.
"In this way, we make certain that these incentives also create long term value for our stakeholders
End of extract |
No doubt a warning shot from major shareholders without wishing to cause too much issue with the rest of the AGM business - RemCo resolution is an advisory resolution.
If they had been that upset, I would have expected to see more votes against the reappointment of the CEO (Clark) and RemCo Chair (Gammon) which both passed with 95% approval.
Line in the sand drawn – do better or else voting won't be so neat next year? |
Well clearly the directors need to demonstrate performance! |
Results of AGM :
Resolution 6 - Report on Directors' Remuneration
The Board notes that the advisory vote on the Directors' Remuneration Report did not receive the required majority number of votes to pass. Prior to the AGM the Remuneration Committee conducted an extensive consultation with the Company's largest shareholders regarding the Directors' Remuneration Report. The Remuneration Committee values the feedback they have received on the Company's remuneration arrangements and will continue to engage constructively with shareholders.
Is this regarding the directors current salaries and options ? |
AGM Statement is full of the "Right Stuff" and gives hope to the share price |
2023 AGM Statement
GBG (AIM: GBG), the experts in digital location, identity verification and fraud prevention software, will hold its Annual General Meeting ("AGM") today at 10am at its registered office in Chester, UK. Shareholders are invited to attend the meeting in person to engage and share views with the Board of Directors.
At the AGM, Richard Longdon, Non-Executive Chair, will make the following statement:
"As reported in our full-year results announcement on 15 June 2023, FY23 was a year of continued strategic progress as GBG reported its highest-ever revenue and adjusted operating profit, supported by contributions from the businesses acquired in the previous year alongside strong delivery in Location and Fraud. Group revenue and profit in FY23 was lower than expected at the start of the year, largely due to significant macro uncertainty and challenging post-pandemic conditions in certain end markets, primarily impacting our identity business in the Americas.
While there has been no material change in market conditions, we continue to expect some gradual revenue acceleration in the latter part of the year and to achieve our FY24 profit and cash generation expectations assisted by a group-wide focus on efficiency. We remain focused on cash generation and repayment of debt and are pleased with the improvement in our current net debt position to £90.9 million, prior to the payment of the final dividend, which is subject to shareholder approval at today's meeting.
Looking to the future, the Board is confident GBG is well-placed to benefit from attractive structural growth in our markets. The increasing proliferation and sophistication of fraud through the advent of generative AI reinforces the need for customers to adopt multi-layered identity solutions. This presents a long runway of opportunity for GBG to capitalise on the breadth of its capabilities and global reach.
Our next scheduled trading update will be the pre-close trading statement in mid-October 2023."
ALL positive and the debt lowering significantly. |
The bottom line is how are GBG fixed going forward? their recent mistake-riddled past is clear for all to see but it is past and any signs on Thursday that the monkey is off the shoulder would be welcome news and create a platform for the share price to head north |
From the annual report and accounts to March 2023 I can see that options over 354k shares to the CEO (issued in prior years) lapsed as the EPS growth and TSR target were not fully achieved. I would suggest that the option awards outstanding over a further 400k options (share match award scheme) will probably be adversely affected by performance to date and will also lapse.
FYI - Performance criteria for the Share Match Plan are set out below and have been the same/similar for a number of years.
Not saying this excuses the current awards and performance but might explain that the CEO has lost out as he used his bonus in prior years to buy shares at market rates in order to get the share match awards - he's lost not only his investment in GBG shares (would have purchased between £4-£8 per share) but also the loss of the option awards.
Remco thinking is always to take action to incentivise and consider what has been lost and see if this can be made up in some way.
I would also suggest that the Remco chair would have met with major investors to check and balance the award rationale with them in order to avoid potential vote against the RemCo report at the current AGM.
Share Match Award Criteria (Page 88 of the 2023 Annual Report):
The share matching awards were subject to a three-year adjusted EPS compound annual growth performance condition with vesting. 75% of the share matching awards were subject to a three-year adjusted EPS compound annual growth performance condition and 25% to TSR vesting requirements. The EPS element vested on a sliding scale from 25% if 8% EPS CAGR is achieved over three consecutive financial years with full vesting being applied where a level of 15% EPS CAGR is achieved. In terms of the portion of the award subject to the TSR measure, 25% of the award vests at median performance against the peer group (FTSE 250) and 100% of award vests at upper quartile, i.e. the 75th percentile.
At the time of this report, based on GBG’s EPS performance and TSR, neither award has vested. |
Nice pickup today ... ahead of AGM on 20th July 2023 at 10:00am on Thursday |
The price they paid was eye watering, I am not surprised it cratered the share price |
Below the current CEO and FD was a group MD who left some months ago but after the Acuant acquisition. No adequate explanation was given for the reason of his departure or where he was going. I recall this was referred to in an RNS so assume he sat on the main board. |
What makes you think the old MD took the rap ? And how could he after he had left ? |
They need to stop rewarding failure and start rewarding shareholders. Seems like the old MD took the rap for the Acuant deal and I am not sure that was entirely fair? |
I would hope in the options the share price has to be at least double what it is now.
Wol...my email to the CFO stated how frustrating the share price is and that they had over paid for the Acuant aquisition and that they should not allow this to happen again on future acquisitions. I just stated points so did not expect a reply which I did not get. |
Just issued new chunks of options for CEO and FD but dont disclose performance conditions! |
GBG has to be in play, and if a realistic offer came in there would be pressure on the Non Execs to recommend it given the recent history. |
Hot did you ever get a reply from the CFO |
Hopefully the AGM and Trading update will be the beginning of a NEW positive era for GBG - it's been too long since we had those positive vibes! At 250p that for me is quite enticing for new or even previous investors |
AGM 20th July which will include a trading update. |
I remember when the CFO bought in over £8 about 2 years ago. |
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