Emeco, Fleetwood, AHG…who’s next?

Automotive Holdings Group has become the third Perth-based company to record a large protest vote by shareholders against its remuneration report, potentially leading to a board spill next year.

At today’s annual meeting, 44.3 per cent of AHG shareholder voted against adoption of the company’s remuneration report.

That is one of the largest protest votes incurred by any listed company this year, surpassed by only a handful of companies such as Crown and Pacific Brands.

The AHG directors also withdrew a motion seeking approval for share placements, after some shareholders expressed concern about the proposal.

Perth companies Fleetwood Corporation and Emeco Holdings have also recorded large protest votes this month.

At Fleetwood’s annual meeting last Friday, 38.9 per cent of shareholders voted against the company’s remuneration report.

And at Emeco’s annual meeting, held in Sydney on Tuesday, 26.4 per cent of shareholders voted against the remuneration report.

A vote greater than 25 per cent constitutes ‘strike one’ under new federal government legislation. Any company suffering two strikes in successive years is required to have a board spill.

AHG incurred the large protest vote despite chairman David Griffiths telling the annual meeting that “this is essentially the same remuneration structure as FY10 which received the support of 99 per cent of shareholders at last year’s AGM”.

The company issued a statement after the meeting that "acknowledges and respects the outcome of this poll and we will now consult with shareholders to understand their concerns about AHG’s remuneration structure”.

The highest earner at the company was managing director Bronte Howson, whose total remuneration actually fell to $2.6 million.

This included a short-term bonus of $705,000 (down from $1.25 million) and accrued share plan benefits of $793,249.

In Fleetwood’s case, the top earner was retiring managing director Greg Tate, whose total remuneration jumped to $1.7 million.

This included a $350,000 ex-gratia termination payment in recognition of over 20 years service and $686,674 of unused leave entitlements.

The protest vote at Emeco related to the payment of dividends on ‘unvested’ shares as part of the long-term incentive plan.

Chairman Alec Brennan said the company received advice that its proposal was in line with market practice, but some shareholders were concerned that management was being rewarded before performance hurdles were achieved.

“We may need to address this issue to ensure we don’t have a repeat of this outcome again next year,” Mr Brennan told Open Briefing.