The pace of shareholder opposition to what they see is as excessive executive and board remuneration is gathering pace in the 2009 annual meeting season.
Downer EDI and Qantas have see either big majority votes or a significant minority vote again accepting the remuneration report or incentive packages for senior executives.
(Qantas was for the second year in row.)
On Monday the Adelaide and Bendigo Bank saw very strong opposition to the remuneration report and proposed incentive packages for two senior executives.
Yesterday it was Melbourne-based toll road giant, Transurban, whose board came under fire at the AGM with shareholders rejecting the infrastructure company’s remuneration report two-to-one.
The remuneration report was rejected with 105.5 million proxies in favour and 236.44 million against.
That’s a vote of just over 69% against. That could be higher than the 67% against vote for the Telstra report at the 2007 AGM.
Last year’s Transurban remuneration report was opposed by 58.56% of votes cast over concerns about the level of payment to former CEO Kim Edwards.
But a poll later reversed the loss.
Shareholders in Transurban ended up voting 47% against the remuneration report in the end after strong institutional voting from the floor pushed the vote over the line.
When the tally was completed following the meeting, Transurban reported that 477 million shares had been voted in favour of the report, and 426 million voted against.
At last year’s AGM, shareholders voted to reject the report by a 58%.
In contrast shareholders at yesterday’s Billabong AGM hardly blinked on the question of the remuneration report, share awards to two senior executives and small adjustments in the exercise price of shares awarded to senior executives.
Around 150 million shareholders voted for these resolutions and the highest ‘no’ vote was just over 23 million, or around 13%.
Earlier this month shareholders of infrastructure and engineering company Downer EDI rejected its remuneration report with almost 60% of the shares voted in the poll against. In all cases the vote is non-binding on companies involved.
At Qantas the vote was near 43%, about the level of the protest vote at the 2008 AGM. In both cases the opposition was directed at the money being paid to the former CEO, Geoff Dixon.
On Monday (according to an announcement yesterday) proposals put to the AGM of Bendigo Bank received strong opposition
The remuneration report attracted an against-vote of 32.46% in the proxies but was passed by a show of hands on the floor of the AGM with no poll and the re-election of the chairman of the remuneration committee, Tony Robinson, received a 25.71% against-votes on the proxies.
But larger protests were made against a $5 million incentive scheme for new CEO Mike Hirst and a $2 million incentive package for the other executive director, Jamie McPhee.
Mr Hirst’s package was approved very narrowly, with 58.44 million votes in favour and a very large 56.73 million against. The margin in favour rose to 52.79% in the poll after the board used the most of the 5.6 million in undirected proxies to vote in favour.
Mr McPhee’s deal received only 50.68% support from the directed proxies and 52.57% in poll.
A year ago conglomerate Wesfarmers had its remuneration report defeated with 50.5% of the shares voted against its acceptance.
It seems shareholders mostly object to the easy performance hurdles set for the board and or the executives concerned.
Earlier Transurban Group said it has had a promising start to the financial year with all its Australian assets reporting traffic growth.
Traffic and revenue results from the first quarter of 2009-10 have been particularly promising, chairman David Ryan told the annual general meeting before the action heated up on the question of the remuneration report.
"All Australian assets reported traffic growth for the quarter, and toll revenue growth exceeded traffic growth on six out of seven roads," Mr Ryan said.
"On a proportional basis, toll revenue increased 6.8 per cent on the prior corresponding period.
"This is an excellent result and a very promising start to the year for Transurban.’’
Transurban securities were down 5 cents at $4.34.
