We wrote about the battle for Alliance Trust, one of the UK's oldest investment trusts in the magazine's investment briefing a couple of weeks ago,and I also looked at the war of words between the trust and its New York hedge fund enemies, Elliott. But things are hotting up.
Yesterday, Pirc, the group that advises shareholders on the best way to vote on these matters, released its recommendations for the AGM on 29 April. There are several key issues in the row.
One is that Elliott believes that Katherine Garrett-Cox, who runs the company, is obscenely overpaid. On this it is(to my mind) quite right, and it seems that Pirc agrees. Garrett-Cox's incentives are considered to be excessive given that her total rewards come to nearly 300% of her base salary, rather than the 200% that is "considered best practice".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Another is that the board isnot independent enough ie, it isnot acting in the interests of the shareholders. On this Pirc also agrees it is recommending that shareholders vote for all three of Elliott's candidates on the basis that independence is a "safeguard against groupthink".
Interestingly, however, it looks like the board of Alliance Trust is also coming around to theview that it isnot independent: it has appointed itsown headhunter to find a "truly independent non-executive director in the summer", something that rather suggests itknows it doesn'thave enough of them already.
However you feel about Elliott (and I have been pretty impressed by itso far), I think that it is clear at this point that it hasalready been a force for good in this case: we haven't even got to the AGM and already Alliance has been forced into accepting change.
I'll be at the AGM in Dundee on 29 April if you are a shareholder I rather think you should come too. It's going to be a fine chance to vote for a better Alliance Trust and to see shareholder capitalism in action.
PS Many things worry me about Alliance Trust, but I'm finding the top ten holdings at the moment a particular concern: run your eye down this list and you will see that some 14% of the trusts assets are invested in funds run by the Alliance Trust funds business. If they were the best funds out there, maybe that would be OK, but can they all have passed such independent scrutiny?
-
Barclays warns of significant rise in social media investment scamsInvestment scam victims are losing an average £14k, with 61% of those falling for one over social media. Here's how to spot one and keep your money safe
-
Over a thousand savings accounts now offer inflation-busting rates – how long will they stick around?The rate of UK inflation slowed again in March, boosting the opportunity for savers to earn real returns on cash in the bank. But you will need to act fast to secure the best deals.
-
House prices to crash? Your house may still be making you money, but not for much longerOpinion If you’re relying on your property to fund your pension, you may have to think again. But, says Merryn Somerset Webb, if house prices start to fall there may be a silver lining.
-
Prepare your portfolio for recessionOpinion A recession is looking increasingly likely. Add in a bear market and soaring inflation, and things are going to get very complicated for investors, says Merryn Somerset Webb.
-
Investing for income? Here are six investment trusts to buy nowOpinion For many savers and investors, income is getting hard to find. But it's not impossible to find, says Merryn Somerset Webb. Here, she picks six investment trusts that are currently yielding more than 4%.
-
Stories are great – but investors should stick to realityOpinion Everybody loves a story – and investors are no exception. But it’s easy to get carried away, says Merryn Somerset Webb, and forget the underlying truth of the market.
-
Everything is collapsing at once – here’s what to do about itOpinion Equity and bond markets are crashing, while inflation destroys the value of cash. Merryn Somerset Webb looks at where investors can turn to protect their wealth.
-
Value is starting to emerge in the marketsOpinion If you are looking for long-term value in the markets, some is beginning to emerge, says Merryn Somerset Webb. Indeed, you may soon be able to buy traditionally expensive growth stocks on the cheap, too.
-
ESG investing could end up being a classic mistakeOpinion ESG investing has been embraced with enormous speed and zeal. But think long and hard before buying in, says Merryn Somerset Webb.
-
UK house prices will fall – but not for a few yearsOpinion UK house prices look out of reach for many. But the truth is that British property is surprisingly affordable, says Merryn Somerset Webb. Prices will fall at some point – but not yet.
