SYDNEY, Dec 4 (Reuters) - Australian retail conglomerate
Premier Investments Ltd watched its profit and shares
soar through the coronavirus shutdowns but shareholders still
voted against its executive pay on Friday, citing concern it was
excessive in the circumstances.
Premier's retail chief executive Mark McInnes was set to
receive a 10% raise to A$2.75 million ($2.04 million) in base
pay, plus millions more in bonuses, after a year when online
sales of its brands like Smiggle stationery and Peter Alexander
pyjamas - plus government relief payments - boosted net profit
by nearly a third.
But owners of 49% of the company's voting shares rejected
its remuneration report at the annual meeting, well over the
quarter required to count as an overall "no" vote. Under
Australia's "two strikes" rule, if shareholders vote down a
company's remuneration report twice, they may call a second vote
to remove the entire board.
The first "strike" in the face of robust performance
reflects a broadening of shareholder concerns from the
traditional subjects of profit, share price and dividends.
Premier's shares are up 11% since February, when equities
markets went into convulsions over virus fears, against a
broader Australian market decline of 7%.
"The CEO's fixed remuneration is excessive relative to
market median," said proxy adviser ISS, which directed its votes
against the remuneration report, noting "an extremely
significant disparity between the CEO and other (key management
The 10% raise was "well above general salary inflation,
particularly in retail employee salary inflation", it added.
Chairman Solomon Lew, whose private company owns a third of
Premier but chose not to vote at the meeting, said it was
"completely unclear to me how it (the vote against) can be
justified in relation to the outstanding performance" of
"Where management teams deliver outstanding results, they
should be rewarded for doing so," Lew added.
Another proxy adviser, CGI Glass Lewis, said the Premier
CEO's bonus was "of such a size that we find it difficult to
support", but voted in favour of the remuneration report, noting
that it would monitor the company's executive pay.
($1 = 1.3464 Australian dollars)
(Reporting by Byron Kaye; Editing by Christopher Cushing)