Solomon Lew’s Premier Investments has moved to try and bury the lingering controversy over changed pay and incentives package for CEO Mark McInnes by calling an extraordinary general meeting (EGM) to seek shareholder approval for the new deal.
Some shareholders and governance advisory groups have criticised the package for Mr McInnes as “overly generous”. The campaign against them shows no sign of going away and normally approval would be sought from shareholders at Premier’s AGM in November.
That would have seen the controversy continue for months, which Mr Lew sees as unacceptable.
Clearly the criticisms have grated on nerves at Premier and yesterday the company surprised with news of the EGM set down for June 15 at which approval will be sought to pay as much as $5 million in termination benefits to Mr McInnes.
The company will also ask for shareholder approval to revise the terms of as many as 1 million performance rights so it can issue awards, even if Mr McInnes fails to meet performance hurdles.
Premier’s move comes after the company signed a new employment contract with Mr McInnes in April. Mr McInnes, who joined the company in 2011, agreed to stay at the helm for another few years.
In return for that agreement, Premier agreed to give Mr McInnes a $1 million-plus pay rise, pay his rent for three years and give him clearance to sell shares worth more than $12 million so he can build a new house in Melbourne.
Premier also wants to be able to approve the issue of performance rights to Mr McInnes even if total shareholder return hurdles are not achieved or if he resigns or is terminated without cause before 2020. And if shareholder approval is not obtained, Premier has agreed to reimburse Mr McInnes for any loss he suffers.
But this new set of goodies has been criticised by governance and proxy advisers and the Australian Shareholders Association. Even if the vote next month fails, Premier Investments will reimburse the CEO from any losses.
Minority shareholders at last year’s annual general meeting criticised a series of undisclosed bonuses paid to Mr McInnes. They delivered Premier Investments its maiden ‘first strike’ of 34% (the test level is 25% of voted shares for a ‘strike’) on the adoption of its remuneration report.
Mr McInnes earned $5.4 million in 2015 and $4.3 million in 2014. Approval from the meeting will kill off the debate. Mr Lew controls 43% of Premier. The question will be, can he vote that stake?
Premier shares eased 0.1% yesterday to $15.80. News of the meeting had little immediate impact.
