RSA Insurance Group Plc (RSA) shareholders backed remuneration plans after the U.K.’s biggest property and casualty insurer by market value cut its dividend.
About 91 percent of shareholders approved RSA’s pay plans, according to results published at the insurer’s annual general meeting in London today. The company paid its board of directors 4.3 million pounds ($6.6 million) in 2012, down from 6 million pounds in the previous year. All other resolutions were passed.
RSA, which insures cars, homes and ships in the U.K., Scandinavia and emerging markets, cut its dividend 33 percent on Feb. 20, citing a “prolonged low bond yield environment” that had cost it 200 million pounds in pretax earnings since 2008. The company has said the dividend cut will save 100 million pounds in 2013, with Chief Executive Officer Simon Lee signaling confidence in the future share price development, saying “absolutely” when asked whether it will recover.
“Given the circumstances, we felt like the right option was to cut our dividend,” Chairman Martin Scicluna told shareholders. “This decision was a tough one to make. The share performance this year has been disappointing so far but is largely a reaction to the dividend decision.”
RSA shares rose 0.4 percent to 113.60 pence at 12:48 p.m. in London, paring declines to 9.6 percent this year. The shares dropped as much as 15.5 percent when the firm announced its dividend cut, with the stock the worst performer on the 10-member FTSE ASX Nonlife Insurance Index this year.
RSA’s net income dropped 18 percent to 351 million pounds in 2012, missing the 380 million-pound median estimate of 17 analysts surveyed by Bloomberg. Investment returns dropped to 515 million pounds from 579 million pounds in the previous year.
“The first quarter of 2013 has been encouraging,” Lee told investors. “We’re committed to maximizing our returns to shareholders. We’ve made a recommendation on the dividend, which the board believes is in shareholders’ best interest.”
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