FTSE 100-listed Associated British Foods reported in its annual report that a subsidiary of the Group incurred political expenditure to the approximate value of £5,000 during the year. The Company has not disclosed any further details on the expenditure, such as the nature of the expenditure, for what purpose the expenditure was incurred, and what subsidiary incurred the expenditure.

The UK Companies Act 2006 requires companies to seek shareholder approval for political expenditure made within the EU totalling more than £5,000 in any 12-month period and to disclose donations over £2,000. The legislation encompasses more than just donations to political parties and includes expenditure towards the realisation of political aims such as political lobbying and trade association memberships. Whilst the amount reported is not material and falls under the threshold for approval, shareholders may have preferred to see greater transparency regarding the political expenditure.

On remuneration, shareholders will likely welcome the increased disclosure provided by the remuneration committee. The annual bonus consists of two parts, a cash bonus worth up to 150% of salary, based 87% on financials and 13% on personal objectives, and a deferred share element worth up to 50% of salary, based on the financial targets only. Previously the committee would provide disclosure of the financial targets when the deferred awards vest, two years after the performance period. However, during the year the committee reviewed the changes to the UK Corporate Governance Code and investor guidelines on remuneration and determined to make retrospective disclosure of the performance targets 12 months from the end of the performance period rather than 24 months later as has been its practice to date. Accordingly, the committee provided disclosure of the targets that applied to both the 2016 and 2017 bonus awards this year. While there remains a one-year lag in disclosure, shareholders will likely welcome the increased timeliness.

Governance Issues at AGMs