Admiral Group plc (ADM) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Admiral's 2022 Annual General Meeting. It is now shortly after 2:00 p.m. and the quorum required by Article 56.1 of the company's Articles of Association, namely 2 members personally present and entitled to vote is met, and I declare the meeting open. Copies of the director's current service agreements as well as copies of current letters of appointment to which nonexecutive directors are party are available for inspection at the rear of this room together with a copy of the new Articles of Association and a copy of the current Articles of Association marked up to show the changes being proposed. Copies of the notice convening the meeting and setting out the resolutions have been made available to you, and I will take the notice as read. I will not introduce each member of the Board individually as biographies of the directors can be found on Pages 134 and 139 of the 2021 report and accounts. This year, we have arranged for the Annual General Meeting to be live streamed for our shareholders. Shareholders have been invited to dial in to the AGM and listen to the proceedings and ask questions. The Chair of the Remuneration Committee, Evelyn Bourke; the Chair of the Audit Committee, Karen Greene; and the Interim Chair of the Risk Committee, Andy Crossley, are present and are available to answer any questions. Before turning to the main business of the meeting, I'd like to dedicate a few minutes to answer any questions that you may have, firstly, from shareholders that are attending the meeting in person.

Good afternoon. My name is Sam, and I'm representing ShareAction asking a question on their behalf. My question is in relation to voluntary ethnicity, pay gap reporting as recommended by The Race at Work Charter. So this measures the average pay of ethnic minority workers in a company compared to the average pay of white workers, similar to the gender pay gap reporting, which is, of course, mandatory. Reports show that the average pay of the ethnic minority worker is far lower than their white's counterparts and given the unprecedented attention on racial equality in the past 2 years, investors are taking greater interest in diversity, equality and inclusion. I was encouraged to read that Admiral is a signatory to The Race at Work Charter and that you published a diversity pack in 2020. In it you state increasing sensitive information completion rates is a key area for improvement, as it will allow you to represent your staff accurately and inform your diversity and inclusion strategy. ShareAction coordinates institutional investors of GBP 3.2 trillion under annual management, who were supportive of voluntary ethnicity pay gap reporting, as a marker of responsible business practice. An advisory group consisting of minority-led organizations such as The Runnymede Trust, which is the U.K.'s leading think tank on race equality are guiding ShareAction's pay gap, ethnicity pay gap campaign. Members also include reboot and Network of Minority Professionals in the financial industry, who have launched an Ethnic Diversity Index scoring companies on representation and action. So I'd like to ask the Board for an overview of Admiral's position regarding ethnicity pay gap reporting, including details about what steps have been taken to get sufficient data. Additionally, would the board be willing to meet the ShareAction and Good Work investor coalition to discuss this issue further. Thank you very much.

Thank you for your question, Sam. I mean I hope you understand the Admiral views, diversity and inclusion as an integral part of our business and something that we take extremely seriously, and we highly value the Admiral culture of which you -- I think you're aware and basically diversity, including ethnic diversity is an important element of that. As you alluded to, we've been -- we've been on the journey with collecting the data. We don't currently publish report on pay by ethnicity, but we have been tracking it internally for a while. And the challenge that we've had about external reporting today is really around data collection and making sure that the data that we have is sufficiently robust and clear in order to be able to do that. And obviously, we're somewhat dependent on colleagues sharing personal information, which some of us are happy historically more than others. I think we're in a reasonable place on that. We've been proactively trying to improve our data collection and data collection capabilities. So we have got meaningful data we can share in the future. We are committed to being an inclusive employer. And we have a whole range of D&I task forces that are looking at various aspects of diversity inclusion, including ethnicity. So as a result of what we're doing, we expect to be able to publish in the near future, but I can't commit to do so today. But as you say, we are signatures to The Race At Work Charter and [Audio Gap] this is something we take very seriously. Any other questions?

Yes. Hi, everyone. I'm Nirushan. I'm a representative of ShareAction as well. I'm a leader within Cardiff Citizens and Citizens Cymru Wales. I work primarily on a campaign called the Community Jobs Compact, which seeks to overcome the employment inequality faced by many young people in Cardiff, especially those from lower socioeconomic and Black-Asian and ethnic minority backgrounds. As part of the Jobs Compact, we ask employers to become Accredited Living Wage employers. The real living wage is currently GBP 9.90 an hour independently calculated to cover the real cost of living and recalculated yearly. Many young people I know, including myself, contribute to their household income. So it is important that all jobs in Cardiff are well paid, sustainable jobs. And believe me when I say that they are not. Admiral are one of the biggest employers in Cardiff and somewhere there are many young people when they finish school or university, somewhere that people want to work. We know Admiral offers share options and bonuses as part of their recruitment and jobs, but that means nothing if you can't afford to pay your rent, your bills, put petrol in your car, also food on the table. Becoming a real living age employer means all employees, including contractors, cleaners, security, admin and support staff who are usually paid the least are paid a real living wage. It ensures all workers are paid enough to live. Cardiff has an ambition to become a real living wage city backed by the council, but Cardiff can't be a living wage city without one of its biggest employers Admiral becoming a real living wage employer. So my question is, will Admiral commit to becoming accrediting as a real living wage employer. And I would like to ask the Board for an update to their position in regards to the real living wage. And additionally, will the Board meet with ShareAction and investors to discuss this? Thank you.

Thank you for your question. We obviously do recognize that you play a very important part, particularly in Wales, ensuring that employees are paid fairly and adequately for the work that they do. We obviously pay the national living wage to all employees. And I think we go above and beyond what we're required to do and that we do also pay the high rate to employees that are younger than 25 as well as those that are over 25. As you say, at Admiral, we have a different remuneration mechanism than other employers, and it's a mix of basic salary incentives and also shares. And we have -- our compensation structure has been so in order to encourage the performance of the company and individuals and also to reward them for the value that they bring to the organization so they can share in the value that's created, and it is an important part of our piece. So we believe that if you take into account the whole package, which includes also, I mean, as you may know, then 10,000 employees receive an annual award of up to GBP 3,600 under our employee share scheme plus they get the dividends on that. But if you take the package as a whole, it is well represented in the community. And that's also -- we do -- we have engaged with the Real Living Wage Foundation in Cardiff as part of that, which we'll continue to do so. So it's something that we take seriously. We obviously value our employees highly. So we're a hugely inclusive organization, and we'll continue to do that. Thank you for your question. Any other questions in the room? No. Okay. Any other questions on the line, Rocha.

No, there are no further questions online at this point.

Okay. Thank you. So thank you for all your questions. We'll now move on to the other business of the meeting. In accordance with best practice and as stated in the notice of the meeting, I am exercising the authority contained in the company's Articles of Association to call for a poll to be taken on the resolutions put to the meeting. In the interest of efficiency and with your permission, I will not read the resolutions out, but each of them is set out in pages -- on Pages 9 to 13 in the notice. Resolutions 1 to 18 are proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half the votes cast must be in favor of the resolution. Resolutions 9 to 23 are proposed as special resolutions. For each of those resolutions to be passed, at least 3/4 of the votes cast must be in favor for the resolution. I propose resolutions 1 to 7 and 9 to 23 as set out on Pages 9 to 13 of the notice. As usual, a separate resolution is proposed in respect to the election or reelection of each director. Resolution 8 concerns my own reelection and I've asked Justine Roberts, our Interim Senior Independent Director, to propose that resolution. I shall now hand the chair of the meeting to Justine for that purpose.

Thank you, Annette. I propose the reelection of Annette Court as Director of the company as in resolution 8 set out on Page 9 of the notice. I will now hand the chair back to Annette.

Thank you, Justine. Many shareholders have sent in a proxy appointing me to vote on their behalf. I will vote as they have instructed me. If they have given me discretion as to how to vote, I should be voting on their behalf in favor of the resolution concerned. I now put all resolutions to vote by poll. Please indicate on your poll card how you wish to vote. The poll will close 10 minutes after the close of the meeting. If you have not yet completed your poll card, please do so now and hand it to the registrar. The results of the voting at the meeting and the number of proxy votes cast for and against together with a number of votes actively withheld in respect to each of the resolutions proposed at this meeting will be announced via a regulatory information service and also placed on the company's website www.admiralgroup.co.uk as soon as practicable following the close of this meeting. I can confirm that based on the proxy votes that have been cast prior to the meeting, there are already material majorities in favor of each of the resolutions that have been proposed. I'd also like to make formal thanks to Mark Waters for his service as Company Secretary over many years. Thank you, Mark. That now concludes the formal business of the Annual General Meeting. I thank you for your attendance, and declare the meeting closed.