Companies

Free food, umbrellas dominate virtual AGM questions

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Inquiries over the AGM gifts was among the popular questions, alongside dividends, that management of companies has had to address through written responses to shareholders’ questions. FILE PHOTO | NMG

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Summary

  • Inquiries over the AGM gifts was among the popular questions, alongside dividends, that management of companies has had to address through written responses to shareholders’ questions.
  • Kenya banned large gatherings such as AGMs in March due to Covid-19, forcing public companies to hold virtual meetings and even internal rules to allow for such meetings in future.
  • Virtual AGMs have presented a win for many companies since the spending is less than for usual physical meetings and the management has also avoided the usual direct confrontation from agitated shareholders.

Concerns about free food, umbrellas and T-shirts dominated queries raised by investors of top listed firms during the virtual annual shareholder meetings in the wake of Covid-19.

Transcripts provided by firms such as Safaricom #ticker:SCOM, KCB #ticker:KCB, Equity Group #ticker:EQTY, Standard Chartered Bank #ticker:SCBK and DTB Group #ticker:DTK indicate that retail shareholders were keen on freebies following the switch to online meetings.

The State ban on physical gatherings had stalled holding of AGMs where most firms provide the giveaways.

It was expected that most would raise questions on how the listed firms intend to navigate the economic fallout trigged by the coronavirus.

Virtual AGMs have presented a win for many companies since the spending is less than for usual physical meetings and the management has also avoided the usual direct confrontation from agitated shareholders.

But many shareholders are not comfortable with the arrangement, citing lost freebies and resultant costs such as internet bundles for attending digital meetings.

Companies have had to explain to shareholders why it was not possible to distribute the AGM freebies.

"Will there be food?" a shareholder asked Safaricom management during the recent virtual AGM.

A DTB shareholder asked the management: “How and when will I be able to get gifts and voucher if they are there this year?”

The same question was asked in various other AGMs with the freebies getting descriptions such as gifts, goodies, vouchers and tokens.

“Could you send via M-Pesa the goodies we receive during AGM-- T-shirts caps and vouchers,” KCB was asked.

“There will be no gifts sent out to shareholders” the bank responded.

Some shareholders have been asking for compensation of expenses incurred on attending virtual meetings such as data bundles.

Huge budgets

Shareholders, especially for companies which have had dividend drought, have depending on the goodies as the only direct benefit from such companies.

DTB said virtual meetings presented a saving to their budget, apart from allowing shareholders from different locations to attend the meeting without having to travel.

While firms admit that virtual meetings have saved them from huge budgets, they are not keen to pass this saving to investors.

“This is a new concept in the conduct of annual general meetings which has been accelerated due to the challenges of COVID-19. It is still too early to quantify the expected payback,” Britam said in response to a shareholder.