IR Monitor – 18 June 2025

In this week’s newsletter:

• London calling: following this year’s Investor Relations Society conference in London, your IR Monitor correspondent Maxime Lopes shares a few takeaways from the event
• Pay, perks and CEO prerogatives: tread carefully when blurring the lines of compensation disclosure according to the FT
• AIM at 30: The Times on three decades in the Wild West of investing
• A challenge for investor relations: corporate insiders use recent rally to dump shares at fastest pace since the US election.
• As Bloomberg reports, this may indicate executives’ concerns about inflated company valuations
• How to address the decline in London market listings: The Times offers some ideas on how to stop the haemorrhaging
• And finally … Matt Levine on ‘golden powers’. Generally speaking, the more shares of a company you own, the more power you have over the company. But not always

This week’s news

London calling

Our FTI colleague Maxime Lopes attended the UK IR Society’s annual conference last week. The event featured a packed agenda with panellists discussing key macro trends and the attractiveness of the UK in light of regulatory reform meant. As passive and algo funds continue to capture capital inflows, pressure continues to mount on active managers and on small- and mid-cap stocks that are excluded from indices. While they appear largely undervalued, UK equities present real opportunities according to investors who participated in the conference. Sustainability was another hot topic, with warnings against greenwashing and overregulation. AI was also a big theme as it emerges as a transformative force, reshaping investor workflows and market dynamics. While there is not one single way to stand out, avoiding the value trap for UK issuers clearly requires a clear and consistent commitment to IR.

Pay, perks and CEO prerogatives

As executives at the US Securities and Exchange Commission question tough rules on compensation disclosures, Brooke Masters at the Financial Times highlights the effects changes could have on investors’ ability to remain informed. Muddying the waters of disclosure and stifling the influence of proxy advisers seems attractive to CEOs yet for investors “say on pay” votes are an important tool to hold companies accountable. Fostering strong investor relations through transparency in disclosure and ratification leaves companies less vulnerable to shareholder activism. 

AIM at 30: Three decades in the Wild West of investing

London’s AIM market is turning 30 and it’s been quite the ride. Over the past three decades, AIM has channelled tens of billions of pounds into the UK economy, serving as a springboard for ambitious and high-growth companies However, the market has been facing a difficult period, in part due to the halving of inheritance tax breaks announced in October’s Budget. Over the course of last year, 89 companies delisted from AIM, while only 18 new listings were recorded. Laith Khalaf from the investment firm AJ Bell tells The Times that “there have been plenty of success stories on Aim in terms of long-term performance… but they are the exception rather than the rule.”

Corporate insiders use recent rally to dump shares at fastest pace since US election

Despite trading just below the US stock market’s February record level, Joel Leon at Bloomberg reports that the buy-to-sell ratio for company executives is currently at 0.26, meaning that corporate executives are selling their shares at the fastest rate since Donald Trump’s re-election in November 2024.  Following a period of major uncertainty, the current ratio tells the story that executives are fearful of further turbulence and perhaps they believe their companies have inflated valuations. Despite this, when company insiders buy shares of their own company, it is a more meaningful signal than when selling. Facilitating large company purchases and carrying out business succession planning are amongst the list of reasons we may see executives selling. Leon also notes that historically C-Suite executives tend to sell more than they buy, arguing that although this is not a red signal for the market, it provides investors with a view of how executives view their own company’s performance in light of the wider financial environment. 

How to address the decline in London market listings

The UK stock market has witnessed a dramatic mix of peaks and setbacks in recent days. Despite the FTSE 100 surging to a record high on Thursday, outperforming Wall Street and outpacing other popular markets like India and Japan so far this year, a wave of corporate exits is reshaping the landscape. A growing number of listed companies are either relocating their primary listings to other countries or being acquired, reducing the overall pool of publicly traded firms in London. So far this year, 30 companies worth over £100 million have left the market, with just one significant IPO, MHA, stepping in. While some analysts caution that continued outflows could challenge London’s long-term standing as a global financial hub, The Times points to potential solutions. These include encouraging greater domestic investment from pension funds and tightening ISA rules to favour domestic listings. While it is argued that global market dynamics are partly to blame, some concur that the UK’s lack of proactive reform is accelerating the decline. As Charles Hall, head of research at Peel Hunt, starkly put it, “at the current run rate we’re not going to have much of a stock market left.”

And finally…  Matt Levine on who really holds the power

It is widely accepted that share ownership typically translates to influence, but as Matt Levine points out, that’s not always the case. While owning a larger stake usually increases shareholder power, there are legal and strategic thresholds where more shares can actually reduce flexibility. For example, in the U.S., surpassing 10% ownership can trigger regulatory restrictions that lead to limited flexibility. Boards may even exploit this by nudging unfriendly investors over that threshold to constrain them. Bloomberg’s Daniele Lepido recalls an alleged spying scandal at Italian yacht maker Ferretti SpA, where a proposed share buyback plan sparked tensions with its largest shareholder Weichai, and triggered scrutiny under Italy’s “golden power” laws. The twist? Some speculate the buyback was a strategic move by management to increase Weichai’s stake just enough to attract government intervention, effectively reducing the shareholder’s influence rather than enhancing it.