Australian companies facing investor anger over executive pay at near record levels, says study

Dexus

06/02/2025 18:00

By Byron Kaye
       SYDNEY, Feb 7 (Reuters) - The number of Australian
companies facing investor opposition over remuneration plans
held near record levels for a second straight year in 2024,
according to a study by shareholder advisor Georgeson.
    The study, shared first with Reuters, underscores not only 
frustration with high executive pay at a time when the cost of
living has risen but also anger over corporate scandals.
    Forty of Australia's 300 biggest companies had more than a
quarter of investors vote against their remuneration scheme at
their annual general meeting last year.
    That was just under record 41 a year earlier which was
double the amount in 2022, the study showed. The vote became
mandatory in Australia in 2011.
    Under Australia's unusual "two strikes" rule, companies must
put a remuneration report to a shareholder vote annually, and a
"no" vote above 25% is a strike. That has no immediate legally
binding effect but a "no" vote two years in a row lets
shareholders hold another vote on whether to remove a company's
entire board.
    Last year, the number of companies that experienced a
shareholder vote against executive pay for a second year running
jumped to 12 from two in 2023. However, none of the follow-up
votes on whether to sack the board were successful.
    Even among companies where the remuneration vote carried,
the average size of winning votes has declined in the past five
years, the report said.
    "When you've got a kind of economic situation where there's
cost of living pressure, higher interest rates and so forth, the
optics of very high executive pay are going to be more in the
spotlight," Paul Murphy, Georgeson's head of ESG for Asia
Pacific, said in an interview.
    The vote has become an all-encompassing platform to express
sentiment towards a company, he added.
    "When the company's been under the spotlight because it's
having sort of customer service issues or having some sort of
conduct scandal, then what you tend to get is a very high
protest."
    Companies hit with shareholder strikes over remuneration in
the past two years include airline Qantas  QAN.AX  which was
grappling with a deluge of negative headlines about industrial
relations, flight cancellations and the conduct of its former
CEO.
    Iron ore miner Fortecue  FMG.AX  also received a strike. The
country's biggest office landlord Dexus  DXS.AX  received a
second strike in 2024 but survived the so-called "board spill"
motion.
    

 (Reporting by Byron Kaye; Editing by Edwina Gibbs)
 ((byron.kaye@thomsonreuters.com; +612 9171 7541; @byronkaye;))