AIM Portfolio Engagement Update
During the quarter, we engaged with two investee companies within our Thoughtful UK Smaller Companies Fund on matters relating to remuneration. Our voting guidelines set out our expectations on executive pay, and we emphasise the importance of clear, comprehensive disclosure. While recognising differences in reporting requirements and resource constraints, we encourage smaller companies to aspire to higher standards of transparency and accountability.
One area we often encounter with smaller companies, particularly those quoted on the AIM market, is the absence of a separate remuneration resolution at AGMs. Instead, remuneration matters are sometimes included within general resolutions. Historically, AIM companies have not been required to separate these votes, which can make it less clear for shareholders to express their views on pay and may lead to votes against the report and accounts or directors. While our guidelines do not explicitly require a separate resolution, we consider this best practice for good governance.
Historically, AIM companies have not been required to separate these votes, which can make it less clear for shareholders to express their views on pay and may lead to votes against the report and accounts or directors.
Encouragingly, the 2023 update to the QCA Corporate Governance Code (the framework of governance principles and guidance for smaller quoted companies in the UK) introduces remuneration as a standalone principle and encourages companies to put remuneration matters to shareholders through separate AGM resolutions. This development supports greater transparency and accountability around executive pay and aligns smaller companies more closely with established market practice.
This development supports greater transparency and accountability around executive pay and aligns smaller companies more closely with established market practice.
In the period, we engaged with two companies to discuss such issues. At the June AGM of AIM-quoted natural animal feed additives group Anpario, we expressed our concerns relating to remuneration and disclosure by not supporting the Report & Accounts resolution. This was due to the absence of a separate remuneration vote, which would have allowed shareholders to express a direct view on pay. We also met with the Chair of the Board to discuss executive pay and wider remuneration governance. The company confirmed it will introduce a separate remuneration resolution in 2026, in line with updated QCA Code guidance. In addition, we encouraged the company to consider a broader mix of performance measures in the pay packages of senior executives and for transparent disclosure.
We also engaged with Tristel (likewise AIM-quoted), a provider of high-level medical disinfection products, regarding limited disclosure on payments to a departing executive and the absence of a separate vote. We spoke with the Remuneration Committee Chair, who provided further context on the situation. However, while this additional information helped clarify the payments, the rationale and disclosure were not fully compelling. Given the lack of a separate remuneration vote, we again expressed our concerns by opposing the Report & Accounts resolution. Tristel also confirmed that it will introduce a separate remuneration resolution in the future.
Outcome
Both companies have indicated that they will implement a standalone remuneration resolution next year. This reinforces the value of a separate vote as a mechanism for shareholders to express views on pay and demonstrates the importance of ongoing engagement and voting activity on remuneration governance.
Written by David Elton and Ffion Spencer
This article was originally published as part of our Q4 2025 Investment Management Report (IMR).
Information is accurate as at 13.01.2026. Opinions constitute the fund manager’s judgement as of this date and are subject to change without warning. The officers, employees and agents of CIP may have positions in any securities mentioned herein. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.