Catering and cleaning services company Spotless Group looks set to ‘face an investor backlash at its annual shareholder meeting this week’, following a ‘first strike’ at CSL and AGL Energy over executive pay, reported the Australian Financial Review (AFR) on 16 October 2016.
The company looks set for ‘a protest vote this week with shareholders taking aim at former KPMG partner Martin Sheppard’s $1.3 million base pay, which is more than 18 per cent higher than his predecessor, Bruce Dixon’.
[quote]”It is inconsistent with the expected practice that new CEOs commence at a lower rate that the predecessor, not at a premium to the outgoing CEO’s remuneration,” stated facility service provider ISS. [/quote]
The AFR noted that ‘ISS and the Australian Shareholders’ Association also take issue with Mr Sheppard receiving an $850,000 bonus and the grant of $2.5 million in rights and options, despite a 40 per cent plunge in the share price in December’.
‘The shock profit warning came just six weeks after Spotless chairman Margaret Jackson told investors “the FY16 results would materially exceed the FY15 results,” observed AFR journalist Patrick Durkin.
However, Spotless CEO Mr Sheppard said that “he had only been at the company for a week before the profit downgrade” and that “ISS’s objections are ‘poorly informed’”.
[quote]”ISS have made a series of objections which we think are poorly informed but CEO rem is an issue for the chairs and the rem committee,” said Mr Sheppard. “When you go for any job you interview, there is an offer on the table and you either take it or leave it.”[/quote]