Mark Kleinman: Corporates queue up for 2026 p(l)ay-date

Mark Kleinman is Sky News’ City Editor and the man who gets the Square Mile talking in his weekly City AM column

Corporates queue up for 2026 p(l)ay-date

Talk about being on the naughty step. For Anglo American, sealing its $60bn merger with Canada’s Teck Resources – and in the process putting well and truly paid to BHP’s strangely handled takeover ambitions – was this month’s overwhelming priority.

Nevertheless, its last-minute decision to ditch a shareholder resolution which could have guaranteed multimillion pound payouts to executives from incentive schemes which were ostensibly performance-based has not gone unnoticed.

Anglo, whose chairman, Stuart Chambers, is reputed to be one of the most sensible and pragmatic figures in FTSE-100 boardrooms, had no option but to pull the vote amid clear signs that it would be defeated.

How, then, to reconcile this bloody nose with the words of London Stock Exchange chief executive Julia Hoggett, who put it pithily this month when she said: “If one of your children is on the naughty step, it is a naughty step; but if all of your children are on the naughty step, it’s a play date.”

Hoggett has been a vocal advocate for a more permissive attitude from institutional investors towards UK company pay, arguing that the global peers against which most FTSE-100 companies are benchmarked are able to attract top executives by paying more.

The Investment Association’s pliability in this area, after it agreed to scrap the register of companies which have seen opposition to shareholder resolutions of at least 20 per cent – genuinely, the City’s equivalent of the naughty step – has served as encouragement to remuneration committee chairs. Hoggett’s view that boards have become more “forceful” on executive pay this year is therefore probably correct, although Chambers and his boardroom colleagues may see it differently.

Next year, Anglo – along with dozens of other FTSE-100 companies – will consult on new remuneration policies; a review of the number of sizeable protest votes, correlated against those companies which have attempted to increase multiples of restricted stock or long-term performance share awards, will determine whether Hoggett is right.

Roadside recovery giants hope exit plans don’t break down

It was mildly amusing to read a Financial Times ‘scoop’ this week on plans being drawn up by the owners of the AA and the RAC, Britain’s two leading breakdown recovery services, to exit those investments in 2026.

In fact, the FT’s story took much longer to arrive than either of the companies’ repair vans – I reported on both private equity backers’ intentions to launch sale or public listing processes on Sky News, in May and July this year respectively.

Churlishness aside, though, the FT’s rehash was well-timed: the bleaker winter months and surge in seasonal roadside callouts mean it is a logical time for the likes of Warburg Pincus (part-owner of the AA) and CVC Capital Partners and Silver Lake (two of the RAC’s shareholders) to be exploring their options.

Between them, the two companies have roughly 29m customers, which effectively amounts to an impressive duopoly in a market with sticky recurring revenues and the opportunity to use artificial intelligence and data in ever-more lucrative ways to cross-sell services to their customer bases.
Of the pair, the RAC looks likely to be first out of the blocks. It has made more impressive inroads into the home car-care market, where engineers are sent to members’ driveways following remote telemetry analysis – a useful and likely growing future earnings stream.

By the same token, the RAC owners’ apparent preference for a stock market flotation will sound alarm bells among the institutional investors with medium-term memories of its rival’s performance as a public company. Heavily indebted, the AA had to be put of its misery when it was taken private in 2020.

Now transformed, the AA’s balance sheet is far more manageable – but a private sale, rather than a return to the glare of public ownership, looks a more sensible route to chart.

Ministers must show mettle with new steel blueprint

Now there’s a surprise – the government has delayed publishing its strategy for the UK steel industry into the new year. The announcement that it would not come, as anticipated, before Christmas, was as predictable as England’s Ashes batting woes down under.

As I wrote in this column a fortnight ago, the appointment of Evercore to advise the Department for Business and Trade and UK Government Investments on its disparate financial exposure to the sector suggests, at least, that some cold logic will be applied to the future of Britain’s main steelmaking facilities.

“The government remains committed to supporting the UK steel sector and delivering a steel strategy,” business minister Chris McDonald told the Commons last week. “We are prioritising developing robust measures to protect our domestic sector, making sure there are healthy levels of imports, and engaging with our partners. We will therefore publish the steel strategy in early 2026.”

I now hear that a combination of at least two of the UK’s remaining steel companies – British Steel and Speciality Steels UK – is becoming more realistic in the eyes of Whitehall officials. That won’t be easy, given that the former is under the control, though not the legal ownership, of the government, while the latter is conducting an auction managed by advisers to the Official Receiver.
Time is not on ministers’ side – and any further delays to a robust strategy for an already crisis-hit industry could prove fatal.