DCC, 12 July 2019
Item 3: Approve the Remuneration Report The structure is unsatisfactory. Pay is not sufficiently weighted toward the long-term in ordinary circumstances. The ROCE targets for the LTI do not appear challenging given recent performance. The bonus is overly reliant on qualitative criteria. Both the bonus and the LTI are overly reliant on EPS. Over-reliance on EPS could result in management making decisions to maximize profits for the short term, often at the expense of long term shareholder value. EPS can be positively influenced through share buybacks, fluctuations in foreign exchange, or amendments made to accounting rules & regulations. Although the quantum is moderate, the continued lack of an acceptable remuneration structure is a concern. For this reason, we recommend shareholders oppose.
Item 4g: Re-elect the ChairmanAs he is also the Chairman of the Nomination Committee, he is considered responsible for composition of the Board. The gender diversity on the Board (27.3%) does not meet ECGS guidelines. We recommend shareholders oppose. Item 6: To increase the maximum aggregate limit on directors' fees payableThis resolution proposes to increase the limit on the aggregate of the ordinary remuneration payable to nonexecutive Directors from €650,000 to €850,000, which represents an increase of 30%. The Company has not proposed a specific use that would justify such a substantial increase. We recommend shareholders oppose.
DCC is a procurement, sales, marketing, distribution and business support services company. Co. operates across four separate divisions: DCC Energy, which is involved in the sales, marketing and distribution of oil and liquefied petroleum gas; DCC Healthcare, which provides products and services to healthcare providers and health & beauty brand owners; DCC Technology, which is involved in the sales, marketing and distribution of technology products; and DCC Environmental, which provides a range of waste management and recycling services.
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