The governance of Australia ASX-listed Tabcorp Holdings has been served a bloody nose, as a significant number of its investors have rejected the firm’s executive remuneration report.
This Wednesday, 40% of Tabcorp investors voted against 2017/18 executive packages.
Australian business news sources report that investors had been incensed by the company attaching executive performance rewards (bonuses) to Tabcorp’s AUS $11 billion merger with main market rival Tatts Group.
The vote sees Tabcorp governance served its first strike under ASX rules. Tabcorp will move to restructure its executive remuneration provisions, seeking to avoid a 25% rejection vote at next year’s AGM, which will force a board spill.
Tabcorp Chairman Paula Dwyer acknowledged investor concerns that executive rewards should be conditional to the success of the Tatts merger.
Nevertheless, Dwyer explained that the rewards were in recognition of ‘extraordinary efforts’ to complete a landmark and business changing transaction which took 14-months to complete.
Continuing its merger integration with Tatts, Dwyer assured Tabcorp investors that executive remuneration policy would change to a ‘synergy-model which reflects the firm’s changed business entity.
“The new performance measure will be based on the achievement of synergies and benefits from the combination at the end of FY21, and the vesting period will be extended from two years to three and a half years.”