Martin Gilbert has been caught up in a peculiar row with his former employer Aberdeen Standard Investments which has resulted in Gilbert voting against his own appointment as Assetco chair.
Sky News reported that ASI used Gilbert’s 9.9% stake in Assetco to vote against his reelection as chairman and to counter a generous annual bonus and long term incentive plan (LTIP) which would come to Gilbert and other executive directors if the firm sees 20% growth in total shareholder value.
City sources told Sky ASI’s votes had been changed at the eleventh hour ahead of the company’s annual meeting and EGM on Thursday.
Aberdeen Asset Management founder Gilbert stepped down as co-chief executive of Standard Life Aberdeen, the parent company of ASI in 2019. However, ASI passively manages his shares in Assetco on his behalf, leading to the bizarre spat.
ASI declined to comment when approached by Portfolio Adviser.
Proxy advisers including ISS have also recommended that shareholders vote against Gilbert’s election on the grounds that he was not independent. ISS also highlighted that the under the current remuneration scheme Gilbert could receive uncapped rewards if Assetco’s shares perform strongly.
Gilbert purchased close to 10% of Assetco in January with the intention of transforming the fire engine leasing company into an asset management acquisition vehicle.
Assetco is sitting on a sizeable amount of cash thanks to a payout of £20m from its former auditor Grant Thornton over its failure to expose fraud within the company. The company’s market capitalisation stood at £52.3m on 25 March as detailed in its proposed change of strategy document.
Shortly after Gilbert’s purchase, Assetco acquired a 2.9% stake in River and Mercantile, which it then doubled a month later with a £5.7m deal which brought Assetco’s total share capital to 5.6%.
Other proposed changes to be put to a shareholder vote on Thursday include the readmission of 100% of its existing share capital to AIM to raise cash to execute its new strategy and widen its shareholder base, as well as the appointment of current chairman Tudor Davies as non-executive director and Gilbert’s former SLA colleague Peter McKellar as chairman.