Plus500 (LSE: PLUS) has launched a shareholder charm offensive to quell growing investor unrest after a contentious annual meeting that sent tremors through its corporate governance foundations.

The fintech
trading powerhouse found itself in unfamiliar territory when key shareholders
wielded their voting power to challenge both its executive pay practices and
board leadership, forcing the company into a strategic pivot to restore
confidence.

Plus500 Intensifies
Shareholder Outreach Following AGM Setback

The fintech
trading platform operator faced a notable setback when its Directors’
Remuneration Report presented during the Annual General Meeting (AGM) failed to
secure majority approval, while the re-election of Board Chair Professor Jacob
A. Frenkel passed with a relatively narrow 71.57% of votes in favor.

In response
to these developments, Plus500’s board has implemented a comprehensive
engagement strategy, conducting extensive discussions with major shareholders
and influential proxy advisory firms during the third quarter of 2024.

“Since the
AGM, consistent with the Company’s commitment to maintaining ongoing,
transparent dialogue with all stakeholders, the Board put in place a detailed
plan to engage with its key shareholders and the shareholder advisory bodies to
which the majority of the Company’s shareholders are subscribed, namely ISS and
Glass Lewis,” Plus500 commented.

The company’s shares on the London market showed no reaction to the latest report, with Plus500 rising just under 0.2% today (Thursday) to 2,362 pence.

Leadership Defense

The
company’s board has strongly backed Professor Frenkel’s continued leadership,
emphasizing his “significant and invaluable experience” in steering
the company’s corporate governance practices. During shareholder meetings in
London, Frenkel personally presented the evolution of Plus500’s governance
framework under his three-year tenure.

“The
board believes that his continuing tenure as Non-Executive Director and Chair
of the Board is for the benefit and of the utmost importance to all
stakeholders,” the company stated in its update to investors.

Remuneration Structure
Under Review

Discussions
with proxy advisors ISS and Glass Lewis revealed that their opposition to the
remuneration report stemmed from concerns about the company’s response to
previous shareholder dissent. Plus500 defended its approach, noting that its
remuneration policy had been “significantly restructured” to align
with UK best practices while considering its unique position as an Israeli
global fintech company.

The company
acknowledged that some performance metrics remain undisclosed due to commercial
sensitivity but committed to exploring potential enhancements to its
remuneration reporting structure.

According to a recent analysis by Finance Magnates, Plus500 spends the most on marketing compared to other FX and CFD brokers listed in London. The company allocates 13.6% of its six-month revenue to marketing and related areas, while others spend just under 8%.

Shareholder Engagement
Initiative

In a series
of face-to-face meetings with major shareholders in London, Plus500’s senior
leadership team, including CEO David Zruia and CFO Elad Even-Chen, engaged in
detailed discussions about governance improvements. While shareholders
reportedly expressed no significant concerns about executive pay amounts, they
focused on structural elements and disclosure levels.

“Overall,
the Company believes that feedback received from shareholders was positive,”
the company noted, adding that it would incorporate feasible suggestions into
future governance frameworks.

What’s Next

Plus500 has
scheduled additional governance meetings for the fourth quarter of 2024 and
into 2025, to demonstrate a long-term commitment to maintaining dialogue with
shareholders. The company plans to provide a final update on these matters in
its 2024 Annual Report, in accordance with the UK Corporate Governance Code.

The ongoing
engagement initiative represents a critical test of Plus500’s ability to
balance shareholder expectations with its strategic objectives while
maintaining strong corporate governance standards in an increasingly
scrutinized financial technology sector.

Last week, Plus500 reported growth for the third quarter of 2024, with revenue rising 11% to $187.3 million and new customer acquisitions increasing 21% year-over-year. The company’s EBITDA reached $82.2 million, a 2% increase from the prior year. However, the EBITDA margin narrowed to 44% from 48% as the company continued its strategic investments in market expansion and product development.