British American Tobacco - 2021 Annual General Meeting – Voting Results Update Statement

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2021 Annual General Meeting – Voting Results Update Statement

06 October 2021

At the Company’s Annual General Meeting (AGM) held on 28 April 2021 all resolutions were passed with the requisite majority of votes, however we acknowledged the vote against received in respect of Resolution 2 ‐ Directors’ Remuneration Report and Resolution 16 ‐ Renewal of Directors' Authority to Allot Shares in our AGM voting results announcement (158 kb) , which has been noted on the UK Investment Association (IA) register of shareholder votes.

Resolution 2 ‐ Directors’ Remuneration Report

A vote of 38.29% was received against Resolution 2 at our 2021 AGM. Whilst we note that the decisions taken by the Remuneration Committee have been supported by the majority of our shareholders, we do recognise that a significant minority of shareholders and some shareholder advisory bodies have not been supportive of these decisions, in particular fixed pay increases awarded to executives in 2020 and 2021. This has been taken on board by the Committee and we are committed to achieving a greater understanding of the underlying reasons that have seen some of our shareholders being unable to support the resolution.

We will be engaging later this year with a broad cross section of our shareholders and shareholder advisory bodies, including a number that have voted against this resolution at the 2021 AGM to further understand their position and perspectives on the management of executive pay.  This engagement will also include the Directors Remuneration Policy which will be put forward to a binding shareholder vote at the 2022 AGM.

Resolution 16 ‐ Renewal of Directors' Authority to Allot Shares

A vote of 27.67% was received against Resolution 16 at our AGM.  Through our shareholder engagement, the Board is aware that there is a divergence between prevailing UK market practice for FTSE companies to retain an authority to allot in line with the IA share capital management guidelines, and governance policies maintained by certain overseas investors which either do not support a general allotment authority or only support a general authority at lower levels.

Whist we recognise that some shareholders are unable to support an allotment authority at the level sought, we note this level of authority continues to be supported by the majority of our shareholders and is in line with prevailing UK market practice. Although there is no present intention to exercise this authority, we continue to consider that this level of authority is appropriate to maintain flexibility for the Company.

We will maintain dialogue with shareholders for which this authority continues to present concerns and will keep best practice in this area under review.

A final update on these matters will be provided in the Company’s Annual Report and Form 20-F 2021, prior to the Company’s AGM in 2022.


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