Automotive Holdings Group was taken by surprise today when two of its major shareholders voted against acceptance of its remuneration report.
Brisbane-based competitor AP Eagers, which has a 19 per cent stake, is believed to have voted against the remuneration report, contributing to a 38 per cent ‘no’ vote.
Former chairman Vern Wheatley, whose family voted against the remueration report two years ago, was believed to have either voted 'no' or abstained.
The Wheatley family has an approximate 7 per cent stake, after selling a large part of its holding to AP Eagers in July last year.
Chairman David Griffiths described the vote as puzzling, as there was overwhelming support for other resolutions.
AHG directors are understood to have been in contact recently with AP Eagers, and Eagers’ major shareholder Nic Politis, and were not told of any issues.
AHG’s current board has opposed granting a board seat to AP Eagers, on the basis it would represent a conflict of interest.
Today’s vote continues the volatile pattern of voting at AHG annual meetings.
Two years ago, there was a 44 per cent vote against the remuneration report; that was understood to have been a protest vote by the Wheatley family.
One year ago, there was only a small protest vote, when the Wheatley family abstained.
Mr Griffiths said today's vote effectively delivers a "first strike". If there is a 'no' vote greater than 25 per cent for two years in succession, the company is required to propose a board spill.
"It is disappointing, given the work the company has done since 2011 to restructure executive remuneration," Mr Griffiths said.
"Its puzzling when you consider that more than 90 per cent of shareholders who voted, overwhelmingly supported all other resolutions, including the granting of the managing director's performance rights and an increase in non-executive directors fees."
