Sometimes CEOs forget exactly what the underlying principles of capitalism are. Here a CEO lashes out at proxy advisors and shareholders who object to excessive pay. That “opportunity to reflect” that led to “more appropriate pay?” That opportunity was the direct result of a 40 percent vote against. If customers do not like a product, executives would not insult them. That is valuable feedback and it is what keeps markets efficient. The same goes for shareholders who are consumers of the company’s stock.
Tabcorp chairman Paula Dwyer has accused investors and proxy advisers of “caucusing to undermine our leaders” after the company was hit with a strike against its pay at its annual meeting.
Ms Dwyer also hit out at attempts to attack the performance and accountability of the company’s directors over the handling of its failed expansion into Britain, declaring the Australian economy would suffer if boards stop taking risks “for fear of retribution”.
More than 40 per cent of Tabcorp shareholders voted against the company’s remuneration report, well above the 25 per cent vote needed to deliver the board a first “strike”.
The heavy protest vote was due to investor disquiet over cash and share bonus payments awarded to management, including chief executive David Attenborough, for completing Tabcorp’s merger with Tatts Group late last year.
Ms Dwyer told the meeting that Tabcorp would change the structure of these bonuses to make the shares vest only on the achievement of certain synergy targets around the merger.
“I think with the opportunity to reflect, it’s more appropriate to do it this way,” Ms Dwyer told The Australian Financial Review after the meeting in Brisbane.