Angry investors in beleaguered class action law firm Slater & Gordon plan to protest on Friday over big bonuses being paid to executives and the board, despite a $1.02 billion full-year loss following last year's disastrous UK acquisition.
Building products giant Boral, listed fund manager Perpetual and struggling distributor Hills also face fiery shareholder meetings on Thursday and Friday as investors take issue with a range of executive pay and performance issues.
Slater's chairman John Skippen, who has resigned from the Super Retail board after an investor backlash, and his board had their fees boosted by more than 50 per cent as the law firm lost three directors and sought to bring in new directors to deal with the crisis.
The payment of a $189,600 bonus to group CFO Bryce Houghton and a $93,750 bonus to group COO Felicity Pantelidis has outraged investors who plan to register their displeasure at the firm's AGM on Friday.
Slater's managing director Andrew Grech also wants shareholders to approve the grant of 485,673 performance rights on top of his existing $637,000 pay packet, despite a year marred by accounting errors, regulatory probes and the $1.3 billion UK acquisition which has cost investors millions and left the firm's international ambitions in tatters.
Not justified
"Given the company's recent performance ... we believe that this plan should be suspended," the Australian Shareholders' Association warned.
"We acknowledge that this is a critical time for the company and it is seen as imperative for the business to hold existing staff to be able to take it back to prosperity, however, the combination of the increased non-executive directors fees, retention payments and [bonus] awards means we will be voting against the remuneration report."
Mr Grech, who offered to resign after the shocking first-half result, has promised to turn the business around within two years by cutting costs and has already reduced staff numbers in Britain by 14 per cent and closed four UK offices.
But shareholder advisory firm ISS agreed the "bonus payments cannot be justified".
"The CFO received a cash bonus of $100,000 which was not subject to any performance measures but was paid on completion of the CFO's probation period," ISS said.
"These bonus payments cannot be justified and are not reflective of the damage and personal losses of other partners and staff of the firm, and investors during this period."
Boral's US-style bonus bonanza
Investors are also expected to take aim at the increase in Boral CEO Mike Kane's pay packet from $5.98 million to $6.96 million on Thursday, including $622,000 in non-monetary benefits for parking, medical, life and disability insurance, despite the company delivering a flat full-year profit last financial year.
"The quantum of [bonuses] received by executives on the whole increased by 21 per cent, whereas FY16 EBIT results represents a $7.2 million decrease from FY15," proxy firm ISS said.
"The current CEO's fixed remuneration continues to be regarded as high when compared to similar-sized companies by approximately 55 per cent."
The ASA has also told members to vote against the remuneration report. It complains the relative TSR performance hurdle means bonuses can vest even if returns are negative and a 50 per cent TSR hurdle means "mediocre" performance is rewarded.
"Shareholders can lose money but executives still receive their awards – this does not align with shareholders," the ASA said.
Much like CSL, which recently incurred a "strike" on pay – Boral argues its executive rewards are designed to be "competitive in the markets in which Boral operates".
The US market is a "key focus" for Boral, which has entered into a joint venture in North America where its own brick-making business is being combined with that of rival Forterra, which was known as Hanson Brick until October 2015. Boral's North American brick business with its head office in Atlanta, Georgia, has been battling since the global financial crisis.
Perpetual, Hills, Fairfax, Downer EDI
The ASA has also taken issue with a 9.4 per cent increase in fixed pay for Perpetual CEO Geoff Lloyd, who received $3.37 million last financial year, ahead of its meeting on Thursday. "This is unacceptably high," the ASA said.
The shareholder association will also vote against the pay plan for underperforming manufacturer turned technology and distribution company Hills, which meets on Friday and has recently again switched CEOs from Grant Logan to David Lenz.
Engineer Downer EDI looks set to avoid a second "strike" and board spill when it meets on Thursday and Fairfax Media, whose AGM is also on Thursday, appears to have been cleared by proxy advisers who advise major shareholders which way to vote ahead of the AGMs.
Several leading companies have already incurred a "strike" on pay at their AGM this year – a protest vote of 25 per cent or more – and face a spill of their board next year, including CSL, AGL Energy, Bellamy's, Spotless, Pacific Current Group, Carsales.com and Mortgage Choice, which incurred an 80 per cent protest vote and sharply criticised the role of the proxy firms.
Commonwealth Bank of Australia is facing a protest vote at its AGM this month over its new 25 per cent "diversity and culture" bonus and retail giant Harvey Norman is facing a shareholder revolt at its meeting this month over $566 million in loans to franchisees which have been forgiven despite a lack of explanation for investors.
