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Premier Investments : Australian Smiggle owner Premier cops salary backlash despite soaring profit

12/03/2020 | 09:45pm

SYDNEY, Dec 4 (Reuters) - Australian retail conglomerate Premier Investments Ltd watched its profit and shares soar through the coronavirus shutdowns but shareholders still voted against its executive pay on Friday, citing concern it was excessive in the circumstances.

Premier's retail chief executive Mark McInnes was set to receive a 10% raise to A$2.75 million ($2.04 million) in base pay, plus millions more in bonuses, after a year when online sales of its brands like Smiggle stationery and Peter Alexander pyjamas - plus government relief payments - boosted net profit by nearly a third.

But owners of 49% of the company's voting shares rejected its remuneration report at the annual meeting, well over the quarter required to count as an overall "no" vote. Under Australia's "two strikes" rule, if shareholders vote down a company's remuneration report twice, they may call a second vote to remove the entire board.

The first "strike" in the face of robust performance reflects a broadening of shareholder concerns from the traditional subjects of profit, share price and dividends. Premier's shares are up 11% since February, when equities markets went into convulsions over virus fears, against a broader Australian market decline of 7%.

"The CEO's fixed remuneration is excessive relative to market median," said proxy adviser ISS, which directed its votes against the remuneration report, noting "an extremely significant disparity between the CEO and other (key management personnel) remuneration".

The 10% raise was "well above general salary inflation, particularly in retail employee salary inflation", it added.

Chairman Solomon Lew, whose private company owns a third of Premier but chose not to vote at the meeting, said it was "completely unclear to me how it (the vote against) can be justified in relation to the outstanding performance" of management.

"Where management teams deliver outstanding results, they should be rewarded for doing so," Lew added.

Another proxy adviser, CGI Glass Lewis, said the Premier CEO's bonus was "of such a size that we find it difficult to support", but voted in favour of the remuneration report, noting that it would monitor the company's executive pay. ($1 = 1.3464 Australian dollars) (Reporting by Byron Kaye; Editing by Christopher Cushing)

© Reuters 2021
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