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RNS Number : 3096L

Morgan Sindall Group PLC

04 September 2023

Morgan Sindall Group plc

Legal Entity Identifier (LEI) number: 2138008339ULDGZRB345

4 September 2023

Morgan Sindall Group plc ("the Company")

   Update on response to 2023   AGM   voting outcome

At our Annual General Meeting ('AGM') held on 4 May 2023, resolution 3 (Approval of the Directors' Remuneration Policy) was supported by a large majority of shareholders but received less than 80% support overall.

In advance of the 2023 AGM, the Remuneration Committee (the 'Committee') undertook a detailed engagement with the Company's largest shareholders in relation to the remuneration proposals, and had amended the final Remuneration Policy design in response to feedback received. Following the 2023 AGM, the Committee reached out to the Company's largest shareholders to continue the dialogue and listen to their views - and in particular to understand why those who either abstained or voted against the Directors' Remuneration Policy ('the 'Policy') had done so.

The Committee received responses from eight investors, the majority of whom reconfirmed support for the Policy and the management team.

One shareholder raised the annual bonus deferral requirement and 2(nd) -year phasing down of the post-employment shareholding requirement as their reason for not supporting the resolution. In both cases the Committee is comfortable that its current approach supports appropriate alignment of executive and shareholder interests. In respect of the annual bonus deferral requirement, the Committee also considers this requirement appropriate given the current shareholdings of incumbent Executive Directors. However, the Committee will reconsider both of these Policy design features as part of the next Policy review.

The Committee also received feedback from two shareholders that their voting had reflected the 'against' recommendation from one of the major proxy voting agencies, which itself was primarily a result of the simultaneous increases to the Policy headroom available under the annual bonus and LTIP schemes. On this matter, the Committee maintains its view that the Policy should be sufficiently flexible to last for a full triennial review period rather than needing to revert to shareholders to seek incremental changes, and reiterates its commitment to write out to major shareholders in advance of using the increased maximum opportunities under either of the variable incentives.

Another shareholder requested that the Committee provide a full explanation in its Remuneration Report of the rationale for the adoption of any increase to the executive directors' incentive opportunities in future years, particularly in relation to the achievement of key strategic objectives, and this feedback is consistent with the current thinking of the Committee.

The Committee continues to be grateful for the feedback received and the two-way engagement with major shareholders. Given overall majority support was obtained for the Policy resolution, it is not proposed to make any further changes to the approach to remuneration that was set out in the 2022 Annual Report. The Company will, however, continue to keep the Policy under review over the coming years and welcomes ongoing dialogue with shareholders and proxy advisers.

Enquiries:

   Clare Sheridan, Company Secretary         +44 (0) 20 7307 9200

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September 04, 2023 07:51 ET (11:51 GMT)

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