Newcrest Mining chairman Peter Hay has vowed to review the gold miner’s remuneration structure, after almost half the shareholder base voted against approving the remuneration report on Friday.
The emphatic first strike against the company’s remuneration structure came after weeks of controversy about the package awarded to new chief executive Sandeep Biswas, who can potentially earn 62 per cent more than his predecessor and a larger base salary than the bosses of BHP Billiton and Rio Tinto.
About 44 per cent of shareholders opposed the vote, easily exceeding the 25 per cent required to deliver a strike.
Newcrest could face a vote over a possible spill of the board if more than 25 per cent of shareholders oppose the remuneration report at next year’s annual meeting.
Mr Hay said he would strive to ensure that did not happen and would resume talks with investors to try and better understand their concerns.
“I don’t think it is satisfactory to have strikes – it is just not good for anyone,” he said. “The board will in coming months consider with stakeholders whether further changes to our remuneration structure should be made.”
Two of the three major proxy advisers had called for shareholders to reject the remuneration report, with ISS Governance labelling Mr Biswas’ pay as “excessive” and Ownership Matters querying the size of his cash bonus, among a number of concerns.
Mr Hay said there had not been one particular issue that shareholders had raised in the weeks leading up to Friday’s meeting in Melbourne.
“You get little pieces of objection here and little other pieces of objection there, and … it is pretty hard to find a consistent thread. I think we will try again to see if we can find a consistent thread.”
When asked if he would be happy to reduce the size of his package, which can reach as high as $10.35 million a year under ideal circumstances, Mr Biswas said; “The board has to go back and review and once that feedback is back we will have a look at it … but certainly the shareholders have sent a message, and we have to listen.”
Funds manager Allan Gray manages more than 3.3 million shares in the gold miner and portfolio manager Simon Mawhinney said Mr Hay’s reaction to the vote was the right one.
“We were pleased with the chairman’s comments around being willing to review the remuneration structure,” he said.
Two Newcrest directors, Lady Winifred Kamit and Richard Knight, were re-elected, but Mr Knight had more than 40 per cent of shareholders oppose his return to the board.
Some proxy advisers had recommended shareholders dump both directors because they were on the board when the disclosure scandal occurred in 2013.
But Mr Hay rejected the notion that the board was to blame for the scandal, which resulted in Newcrest paying a $1.2 million settlement to the Australian Securities and Investments Commission.
“It wasn’t really the board’s responsibility, what happened was accidental loss of confidentiality and the board’s job is to make sure the systems are right. The board thought the systems were right and there was an accident, and so the board strengthened the systems.
“I’m not very convinced by the idea that somebody should become the fall guy for it because they were there on the board at the time. I’m not interested in blame.”