No wonder CSR chairman, John Gillam was waxing lyrical about rising electricity and gas costs and the dangers they pose to Australian manufacturing at yesterday’s annual meeting of the building products maker.
It looks like, from a distance that he was trying to postpone the inevitable thumbs down from shareholders upset at the way management was given bonuses for what was a below-par performance in the year to March 31 – one that was helped a lot by the downturn in building and construction – especially home building and renovations.
Mr. Gillam, the former longtime CEO of Bunnings (which is owned by Wesfarmers), became chairman of CSR last year.
He told the meeting that more needs to be done on energy reliability and affordability, alongside the impact of carbon emissions and climate change.
“Gas consumers in Australia now pay as much for gas as our Asian neighbours who have no local gas reserves,” Mr. Gillam told shareholders at the group’s annual meeting in Sydney. “This market inequity greatly hinders all parts of manufacturing,” he said.
CSR makes building products such as Gyprock plasterboard, PGH bricks, Hebel precast concrete blocks and panels, and Bradford insulation and storage battery products. The company also owns a 25% stake in the Tomago aluminum smelter near Newcastle in the Hunter Valley.
But after that was over it was time to re-elect two directors (which were done with 96% of the votes cast in favour) and deal with the remuneration report.
There it wasn’t good news for CSR which received a ‘first strike’ against its remuneration report after 34% of shareholders voted against the resolution to approve the remuneration report.
A vote of 25% or more against the approval of the report is considered to be a first strike, which if repeated at the next year’s annual meeting, triggers an automatic spill of the board.
Proxy advisory firm Ownership Matters recommended voting against the CSR remuneration report.
Media reports say the advisory group was concerned that bonuses were awarded at CSR for the year ending 31 March, when total shareholder return fell 33% and earnings before interest, tax, depreciation, and amortisation dropped 17% in the same period.
CSR shares lost nearly 2% yesterday to close at $3.97. The shares are up 41% year to date in 2019 but down nearly 14% in 2018-19.
