Melrose Industries - AGM 09 May 2019
Item 2: Approve the Remuneration Report
The structure is unacceptable given the lack of a cap on the LTIP. The main concerns are with alignment given that 80% of the bonus is determined by EPS and the LTI is 100% determined by share price. Both of these metrics are not considered appropriate as they can potentially be influenced by executives. We are further concerned with the Company's disclosure as they did not provide an expected value for the LTI award made during the year. We recommend shareholders oppose.
Item 8: To re-elect as a director, Justin Dowley
He has been serving on the Board as Lead Independent Director, but changed his role to Chairman on January 1, 2019. The Company previously had an Executive Chairman.
We consider the appointment of a non-executive Chairman, who was independent upon appointment, to be an important improvement in the Company's governance. For this reason, we consider our concerns over the overall level of independence on the Board, which is insufficient, to be secondary. We recommend that shareholders vote in favor of this resolution.
Melrose Industries consists of four divisions: the Air Management division, which includes the Heating, Ventilation & Air Conditioning business, which manufactures and sells split-system and packaged air conditioners and Air Quality & Home Solutions businesses, which is a manufacturer of ventilation products; the Security & Smart Technology division, comprising the Security & Control, Core Brands and Access Systems businesses; the Ergonomics division, which includes the Ergotron business, a manufacturer and distributor of products designed with ergonomic features; and the Energy division, which includes the Brush businesses that supply energy industrial products to the global market.
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