S&P 500 constituent Monsanto Company yesterday became one of the first US companies to hold its AGM following the introduction of the new US rules requiring an advisory vote on the remuneration of the directors and an advisory vote on the frequency of such a vote. Shareholders did not follow the management recommendation on the frequency of the say-on-pay vote and the say-on-pay vote itself passed although recorded significant dissent.

The new votes are required under the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010. Companies are required to put forward a resolution on the frequency of the 'say-on-pay' vote at least every six years. Shareholders may opt for an annual, biennial or triennial frequency. To date most companies (including Monsanto) have recommended triennial votes, however, as noted in Manifest's research report on the Monsanto meeting, US best practice guidelines issued by the Council of Institutional Investors suggest that an annual vote is appropriate.

The voting results for the meeting have been released by Monsanto in an SEC filing. Excluding broker non-votes, 62.20% of  votes cast backed an annual vote, with 35.91% in favour of the triennial vote recommended by the Board. 1.36% of votes favoured a biennial vote with 0.53% abstentions. The filing notes that, 'in accordance with the results of this vote, the Board of Directors determined to implement an annual advisory vote on executive compensation'.

On the advisory vote on pay, the voting results showed a significant rebellion by international standards. Some 33.81% of votes were cast against the remuneration report with a further 1.28% abstentions - aggregate dissent being 35.08%. During the 2010 calendar year, only five of the FTSE 100 recorded larger levels of dissent in relation to the equivalent UK vote - Tesco recording the highest dissent at 47.08%. Average dissent in the FTSE 100 during 2010 on the remuneration report vote was 9.1% (2009: 12.4%).

Manifest's report on Monsanto's AGM noted generous severance arrangements for the Chairman & CEO, Hugh Grant, with termination provisions totaling three years' salary and average bonus. The summary compensation table in the DEF 14 filing noted total remuneration for Grant of $13.2m (including the fair value of long-term incentives awarded).

The full voting results for the meeting are available to clients on Manifest VoteWatch.