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Shareholders at Evercore Partners, the independent investment bank, have voted against a board proposal to increase the amount of equity that could be awarded to employees under the company’s incentive plan.

The bank’s board, which includes its founder and chairman, Roger Altman, recommended in April that the company increase the number of shares available in its stock compensation plan by 11m, or 55 per cent, to take the overall stock available to 31m. The bank has used 14m of the shares allocated to the programme back in 2006, leaving almost 6m available for future awards.

Shareholders cast more than 36m votes on the suggested change, with more than 57 per cent voting against the revised plan, according to a recent regulatory filing. The vote is binding on Evercore, meaning the bank will have to make do with the 6m shares, valued at about $144m based on Monday’s share price.

“We have sufficient equity under our current plan for us to continue to run the business and execute our strategy for the foreseeable future,” Evercore said. “We will continue to maintain an active dialogue with our stockholders about the best course of action for the company going forward.”

Amid a slowdown in mergers and acquisitions in recent months, Evercore has nabbed some high-profile deals. The bank says it is now competing with larger firms, and is hiring more senior bankers.

Larger banks have not been immune to shareholder revolts either. UBS, the Swiss investment bank, failed to secure the necessary two-thirds majority to issue new shares for employee options last month, while Citigroup investors also voted against a pay plan for the bank’s chief executive, Vikram Pandit, back in April.

“An increase in the number of shares available for equity grants to our employees is necessary as part of our continuing commitment to attract, retain and motivate employees and to align the interests of our employees with those of our stockholders,” Evercore said in its April proxy statement for shareholders.

“With the company’s recent growth in revenues and operations, the company has been hiring senior executives and other key employees and granting them stock-based awards and accordingly the number of shares available for grant under the original plan has been reduced,” Evercore’s directors said when they unanimously recommended shareholders vote in favour of the increase in available stock which, they said, would replenish the compensation pool “over the next several years.”

Evercore acknowledged that equity grants are “potentially dilutive” in its April filing, but said that the bank’s stock repurchase programme “offsets the dilutive effect.”

Copyright The Financial Times Limited 2017. All rights reserved.

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