DCC - AGM 17 July 2020
Due to the continuation of the Irish Government’s Covid-19 restrictions in relation to public gatherings, the Board of DCC plc has decided that this year’s AGM will be held with the minimum necessary quorum in accordance with the Articles of Association of the Company. Shareholders are requested not to physically attend the meeting. A listen only dial-in facility will be provided to allow shareholders to listen to the business of the meeting. Further information, as well as the dial-in numbers can be found in the Meeting Notice.
Directors Remuneration Report
Under ITEM 3, the Company seeks shareholder approval of the Directors’ Remuneration Report. The quantum for 2019/20 is not excessive as the total remuneration is below the comparison with both the MSCI country and sector. Total bonus, as well as LTI, are below our 150% ceilings. However, ECGS regrets that the ROCE targets for the LTI do not appear challenging enough given recent performance. Furthermore, there is an overlap between the EPS metric used in the short and long term incentives. Accordingly, both the bonus and the LTI are overly reliant on EPS, and the remaining criteria for the variable remuneration are either non quantifiable or not challenging enough. Under these conditions, we recommend shareholders to OPPOSE.
Purchase of shares
Under ITEM 10, the Company seeks shareholder approval to repurchase shares. DCC employs “per share” performance conditions (EPS after tax) as part of short-term and long-term incentives. The EPS accounts for 70% of bonus and 40% of LTI, which is above our limit of 50% for raising concerns. We regret that the company has adopted EPS as a performance metric accounting for a percentage of variable remuneration in excess of ECGS guidelines and the Company has not explicitly indicated whether its performance plans will be adjusted for the impact of the repurchase program. Accordingly, we recommend shareholders to 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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