Rolls-Royce

Pearson Pay Vote Lost

Shareholders in Pearson (PSON) yesterday rejected the Remuneration Report on a vote at the company's AGM. That was by 61% opposed to 32% supporting with 6% abstaining. But they approved the Remuneration Policy. Opposition to the Report seemed to be based on the fact that CEO John Fallon achieved a 20% rise in total pay despite a record loss and several profit warnings. However the share price rose on the day substantially by 12% perhaps because of a positive first quarter trading statement ...

Rolls-Royce – Audits Investigated and AGM

Yesterday (4/5/2017) I attended the Rolls-Royce (RR.) Annual General Meeting in Derby. In former years they used to hold the meetings in London but it's been Nottingham and Derby the last couple of years. As a result, from talking to a few attendees it seemed to be mainly Rolls-Royce employees and retirees attending rather than the normal private investor crowd. The choice of venue may of course be deliberate so as to achieve a more sympathetic audience. But the story promoted by ...

Pay Revolts and Rolls-Royce Voting Recommendations

According to a number of press reports we seem to be heading into the AGM season with another year of pay revolts. There are also rumours that Mrs May is to proceed with introducing annual pay votes. Chris Cummings, CEO of the Investment Association, writing for the Guardian said "Too many people still feel they are not sharing this country's prosperity. Companies can either act responsibly now and shape a more responsible 21st-century corporate Britain or they can carry on as before ...

Rolls-Royce Bribery Settlement – Questions Worth Asking

On the 17th January aero-engine maker Rolls-Royce announced a settlement with the Serious Fraud Office (SFO), US Department of Justice (DoJ) and Brazilian authorities over past bribery and corruption in the company to win orders. The company will be paying £670 million plus interest over the next few years under Deferred Prosecution Agreements (DPAs) so as to avoid prosecution. Current CEO Warren East had this to say: "The behaviour uncovered in the course of the investigations by the Serious Fraud Office and ...

Rolls-Royce Accounts Adjustments – Were They Prudent?

Rolls-Royce provided a trading update today, and covered the impact of IFRS 15 which is probably a lot more important. IFRS 15 is a new accounting standard concerning revenue recognition which will come into use in 2018. It will have a major impact on the figures reported by Rolls-Royce because of their past recognition of revenue and profits from long term maintenance contracts. For example, Rolls-Royce report that when looking at the 2015 accounts the "Changes result in adverse notional adjustments to ...

Rolls-Royce and Voting Procedures

I published a report on the Rolls-Royce Annual General Meeting (AGM) in the last ShareSoc newsletter and it is also on our Members Network. I wrote to the Chairman after the meeting complaining about his response to one of my questions where he suggested that the proxy votes were "overwhelmingly" in favour on all resolutions when one got only 87% support and another only 94% support. I pointed out that I had to ask about the figures because he was using ...

Rolls-Royce and Other AGMs

Yesterday I attended the Annual General Meeting of Rolls-Royce Plc - held at 11.00 in Nottingham (at a conference centre on the University Park). Why move the venue from London where it has been held since 2004? Probably to attract a more sympathetic audience of ex-employees I suspect. Shareholders in Rolls-Royce don't need to be told that this company is going through a rough patch. Profits in the last two years have been miniscule, the dividends have been cut and even revenue ...

Does Rolls-Royce need shaking up?

Does Rolls-Royce (RR.) need shaking up? Or more to the point perhaps, will they be following the disclosure that activist fund manager ValueAct has taken a 5% stake in the company, although their agenda is as yet unclear. On the 30th July Rolls-Royce issued their half-year results. Results were disappointing as expected. The order book was up, but underlying revenue was down and underlying profit before tax down by 32%. This is basically the same story as was evident at the full ...

Who are the Election Winners and Losers?

Who are the General Election winners and losers? Well most investors have benefited because the market as a whole has risen today after the election results gave the Conservatives an unexpected victory. Specific sectors that benefited were house builders and utility companies. House builders were generally up at the time of writing this note, with Berkeley Group in particular up 10% - no doubt investors being relieved there would be no mansion tax affecting expensive properties in London.  Utility companies were ...

Change at the top at Rolls-Royce

Rolls-Royce (RR.) have announced the abrupt departure of CEO John Rishton, although apparently it was his desire to retire and "have a change of lifestyle" that prompted this rather than pressure from the board or from shareholders. It would appear he may not have been enjoying the job of late. After the dismal last set of results it is not a surprise. I commented then (in February) by saying "My view: it may be a great business with great products but ...