STV faced a protest vote over its revised remuneration policy at its annual meeting yesterday, as its new boss refused to rule out shutting its digital STV2 channel.
The broadcaster saw shareholders carry all 15 resolutions tabled to them at its annual meeting yesterday, which saw chief executive Simon Pitts make his first appearance before a major gathering of investors at its Glasgow headquarters.
Shareholders voted convincingly to carry the firm’s remuneration report for 2017, with 98.79% of votes going in its favour.
However, the resolution calling for support for its revamped remuneration policy saw some rebellion, as nearly 20 per cent (19.85%) of the votes cast went against it. The broadcaster’s 2017 annual report states the main changes to the remuneration policy as “strengthening the requirement to apply a two-year post vesting holding period to all LTIP (long-term incentive plan) awards granted from 2018; increasing shareholding requirements for executive directors to 150%; and for future executive appointments reducing pension contributions to 7%”.
Following the shareholder votes, Mr Pitts, who arrived at STV in January following 18 years with ITV, told shareholders he will unveil the findings of the review he has been carrying out since succeeding Rob Woodward on May 16.
Mr Pitts gave no specific details on the content of his review, confining his presentation to issues such his early impressions of his new company, its potential, and issues such as opportunities in the market for TV advertising amid the rapid growth of Netflix and Amazon. He confirmed that his assessments would look at the “optimal line-up” of channels at the broadcaster.
Asked after the presentation whether STV2 has a future, Mr Pitts said: “We’re looking at all areas of the business to assess our performance, and that includes STV2. We’re confident we will put a growth strategy in place right across digital, broadcast and production.”
STV2 was launched in April last year, just two days before Mr Woodward announced his intention to resign as chief executive after a 10-year tenure. The former boss said the channel, which effectively combined the firm’s digital channels for Glasgow and Edinburgh with new licences for Aberdeen, Ayr and Dundee, would offer a “distinct schedule for Scotland”.
STV2, home to the flagship STV News Tonight programme, made a loss of £0.8m last year, which the company said was incurred as the service took steps to become established.
Yesterday, STV reported that national airtime revenue had increased 1% in the first quarter – in line with expectations. It expects national airtime revenue to be down 2% to the end of May, although it is forecasting growth in the first half overall with the World Cup kicking off in June.
The figures were announced as the company said its production arm had won five new documentary commissions for the BBC. The commissions are the first to be awarded by BBC Scotland as part of its additional investment in Scotland. The details of the programmes were not disclosed.
The BBC has also confirmed that it has commissioned a second drama from STV Productions for BBC 1, Elizabeth is Missing. It had already commissioned a drama series, The Victim, which will be shown on BBC 1 later this year.
Mr Pitts said sentiment among advertisers was improving after a challenging year in 2017.
He had earlier said that evidence shows TV advertising is becoming more effective, despite the growth of streaming services such as Netflix. He said TV advertising as a share of overall advertising spend was likely to stay steady at 25% for the next 15 to 20 years.
“While there is structural pressure in TV advertising, there is no cliff edge,” he said.
Mr Pitts said efforts were ongoing to replace industry veteran Alan Clements, who stepped down as head of productions at the broadcaster. He had been with STV since 2008.
STV non-executive Michael Jackson stepped down from the board after nine years’ service at yesterday’s meeting. David Bergg will join as non-executive director on May 1.
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