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Form 6-K SMITH & NEPHEW PLC For: Apr 14

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April 14, 2016 12:56 PM EDT
 
 
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
 
 
Report of Foreign Private Issuer
 
 
Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of

1934
 
 
April 14, 2016 
 
Commission File Number 001-14978




SMITH & NEPHEW plc
(Registrant's name)



15 Adam Street

London, England WC2N 6LA
(Address of registrant's principal executive offices)

 
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.]

 
Form 20-F X                Form 40-F
    ---                               ---

[Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1).]


Yes                        No X
---                         ---

 
[Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7).]

 
Yes                      No X
---                         ---

[Indicate by check mark whether by furnishing the information contained
in this Form, the registrant is also thereby furnishing information to the
Commission pursuant to Rule 12g3-2 (b) under the Securities Exchange Act of
1934.]

 
Yes                  No X
---                   ---

 
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2 (b) : 82- n/a.





 
14 April 2016
 
Smith & Nephew plc
 
Smith & Nephew announces the results of the voting by poll on the resolutions put to its Annual General Meeting held at 2pm on 14 April 2016.
 

Resolution
For/Discretion
(Number of
votes)
 
Percentage For/Discretion
(%)
Against
(Number of
votes)
Total votes validly cast
Percentage  of relevant shares
in issue
(%)
Withheld
(Number of votes)
Ordinary resolutions 
            
             
1. To receive and adopt the audited accounts
631,479,299
99.99
70,136
631,549,435
70.51%
1,712,958
             
2. To approve the Directors’ Remuneration Report (excluding Policy)
272,923,229
46.99
307,890,596
580,813,825
64.85%
52,448,566
             
3. To declare a final dividend
633,044,503
99.99
47,587
633,092,090
70.68%
170,303
             
4. To re-elect Vinita Bali
626,444,216
98.97
6,508,156
632,952,372
70.67%
309,145
             
5. To re-elect Ian Barlow
631,099,788
99.71
1,855,177
632,954,965
70.67%
307,427
             
6. To re-elect Olivier Bohuon
627,715,177
99.17
5,237,404
632,952,581
70.67%
309,811
             
7. To re-elect The Rt. Hon Baroness Virginia Bottomley of Nettlestone  DL
628,118,295
99.23
4,848,061
632,966,356
70.67%
296,037
             
8. To re-elect Julie Brown
626,917,710
99.05
6,022,024
632,939,734
70.67%
322,658
             
9. To re-elect Erik Engstrom
631,471,358
99.77
1,434,338
632,905,696
70.66%
356,697
             
10.To elect Robin Freestone
630,631,405
99.64
2,282,040
632,913,445
70.66%
348,948
             
11. To re-elect Michael Friedman
629,102,601
99.40
3,827,947
632,930,548
70.66%
331,843
             
12. To re-elect Brian Larcombe
611,956,966
96.81
20,153,487
632,110,453
70.57%
1,151,939
             
13. To re-elect Joseph Papa
613,133,671
97.54
15,450,120
628,583,791
70.18%
4,678,600
             
14. To re-elect Roberto Quarta
623,320,236
98.55
9,174,439
632,494,675
70.62%
767,718
             
15. To re-appoint KPMG LLP as the Auditor
627,578,788
99.84
981,253
628,560,041
70.18%
4,702,351
             
16. To authorise the Directors to determine the remuneration of the Auditor
632,491,553
99.94
378,237
632,869,790
70.66%
392,603
             
17. To renew the Directors’ authority to allot shares
622,400,709
98.34
10,534,835
632,935,544
70.67%
326,849
             
Special resolutions
            
             
18. To renew the Directors’ authority for the disapplication of the pre-emption rights
573,758,792
93.69
38,660,179
612,418,971
68.37%
20,843,420
             
19. To renew the Directors' limited authority to make market purchases of the Company’s own shares
628,940,015
99.39
3,851,185
632,791,200
70.65%
471,192
             
20. To authorise general meetings to be held on 14 clear days’ notice
535,087,474
84.55
97,787,969
632,875,443
70.66%
386,949

 

The number of Ordinary Shares in issue on 12 April 2016 at 6pm (excluding shares held in Treasury) was 895,684,064. Shareholders are entitled to one vote per share.  A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes validly cast.

A copy of the Resolutions passed as Special Business at the Annual General Meeting is being submitted to the UK Listing Authority and will shortly be available for inspection at the National Storage Mechanism document viewing facility at: http://www.morningstar.co.uk/uk/nsm
 
The Board notes that Resolution 2 to approve the remuneration report has received a significant number of votes cast against it (307,890,596 votes, 53.01% of votes validly cast). In addition, the holders of 52,448,566 shares withheld their votes.

Joseph Papa, the Chairman of the Remuneration Committee undertook an extensive engagement programme with shareholders ahead of the Annual General Meeting and has discussed this outcome and shareholder views with the Remuneration Committee and the Board over the past few days. The Board notes that shareholders concerns are focused mainly around the use of discretion exercised by the Remuneration Committee when determining the vesting of the proportion of the Performance Share Awards subject to the Total Shareholder Return (TSR) measure. We contacted the holders of around half our shares when we posted the Annual Report. Since then, around a quarter of our shareholders have contacted us to let us know their voting intentions and Mr Papa has discussed the process the Remuneration Committee went through in reaching its decision with most of these investors. Mr Papa also spoke to the Investment Association and Institutional Shareholder Services, organisations which analyse Company annual reports and make voting recommendations and seek views from their members.

A significant number of shareholders were supportive of the Remuneration Committee’s use of discretion, recognising that during the three year performance period, shareholders had enjoyed an excellent 80% absolute return, well ahead of the FTSE 100 at 20%, whilst the executives who had created that success would have received no reward in respect of TSR had the Remuneration Committee not exercised its discretion. This exercise of discretion resulted in a total payout of £2.1 million shared between around 60 senior executives. Nevertheless, a significant number of shareholders were opposed to the use of upwards discretion on principle, independent of their views of the performance of the Company.

We recognise that the use of discretion is a matter where there is considerable divergence of opinion. In spite of the voting outcome, the Remuneration Committee and indeed the Board unanimously believe that in these particular circumstances the Remuneration Committee made the right decision in aligning executive reward to the shareholder experience. It did not take the decision lightly and considered the position over a number of meetings, looking at multiple different scenarios. The use of discretion in 2016 is not intended to create a precedent for future years, but was used to address a particular anomaly arising as a result of losing three companies from the TSR peer group due to market consolidation during the performance period. Mr Papa had met with a number of major shareholders at the end of 2015 to discuss how this matter should be addressed. The overwhelming response from the shareholders he met was that substituting new companies for the companies which had fallen out of the peer group, in accordance with the Plan Rules which had been drafted to accommodate potential industry consolidation, would not be appropriate. Instead the feedback from some of these shareholders was that it would be better for the Remuneration Committee to exercise their discretion, which was exactly what they did.

Looking ahead, as mentioned in our 2015 Annual Report, the Remuneration Committee is undertaking a thorough review of remuneration arrangements during 2016, ahead of putting a revised Remuneration Policy to shareholder vote in 2017. Over the summer, they will consult with a broad range of shareholders to solicit their views on how best to align executive reward with shareholder interests.

We thank the shareholders, the Investment Association and Institutional Shareholder Services who have engaged with us to debate the issues which the Remuneration Committee has faced.


Susan Swabey
Company Secretary
Smith & Nephew plc

Tel:  +44 (0)20 7401 7646

 
SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
Smith & Nephew Plc
(Registrant)
 
 
Date: April 14, 2016
 
 
By: /s/ Susan Swabey
-----------------
Susan Swabey
Company Secretary
 
 
 

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