Tabcorp shareholders revolt against exec bonuses
News on 19 Oct 2018
News on 19 Oct 2018
This week’s Tabcorp annual general meeting proved an uncomfortable one for its executives as 40.4 percent of shareholders voted against the board’s decision to increase bonuses following the merger with Tatts.
34.7 percent of shareholders also voted against a 20 percent increase to $3 million allocated to the directors’ pool.
Tabcorp chairman Paula Dwyer acknowledged investor complaints that her executives’ rewards were based on the implementation of the Tatts merger, rather than for extracting maximum synergies from the alliance; she promised to introduce and implement a more synergy-appropriate performance measure in future, saying:
“After considering shareholders’ feedback, the board acknowledges the concerns and now intends to apply a synergy-based performance measure and to extend the vesting period for the restricted shares granted to key management personnel.”
The directors have cause to tread carefully; under Australia’s Corporations Act company directors are held accountable for executive salaries and bonuses. Should more than 25 percent of shareholders reject a company’s remuneration report two years in a row, shareholders are given a vote to determine whether all the directors will need to stand for re-election.
The Tabcorp revolt could therefore be regarded as a first step in that direction.
News on 19 Oct 2018
This week’s Tabcorp annual general meeting proved an uncomfortable one for its executives as 40.4 percent of shareholders voted against the board’s decision to increase bonuses following the merger with Tatts.
34.7 percent of shareholders also voted against a 20 percent increase to $3 million allocated to the directors’ pool.
Tabcorp chairman Paula Dwyer acknowledged investor complaints that her executives’ rewards were based on the implementation of the Tatts merger, rather than for extracting maximum synergies from the alliance; she promised to introduce and implement a more synergy-appropriate performance measure in future, saying:
“After considering shareholders’ feedback, the board acknowledges the concerns and now intends to apply a synergy-based performance measure and to extend the vesting period for the restricted shares granted to key management personnel.”
The directors have cause to tread carefully; under Australia’s Corporations Act company directors are held accountable for executive salaries and bonuses. Should more than 25 percent of shareholders reject a company’s remuneration report two years in a row, shareholders are given a vote to determine whether all the directors will need to stand for re-election.
The Tabcorp revolt could therefore be regarded as a first step in that direction.
