09 MAY 2014www.theaustralian.com.au
Alumina Limited second strike unlikely
Edited by : AL CIRCLE
2 min read
ALUMINA is expected to avoid becoming the first of the big-name resources companies to suffer a second strike from shareholders on its remuneration report at today’s annual meeting in Melbourne.
Last year, Alumina suffered a no vote of slightly more than 50 per cent, prompting an overhaul of its remuneration report after seeking advice from independent consultants.
Last year’s no vote was 50.07 per cent, forcing Alumina to include a contingent resolution on its notice for today’s meeting for a board spill — to be held within 90 days — in the event that it receives a second strike.
A second strike is incurred if votes against the remuneration report again exceed more than 25 per cent of the votes cast.
Alumina chairman John Pizzey said at last year’s meeting the first strike partly reflected a “general level of discontent’’ among investors as the resources boom of the past 10 years gave way to lower share prices.
Alumina shares traded at $1.31 yesterday, up 25 per cent on its level of a year ago of $1.05. But today’s expected all-clear for the remuneration report is more of a response to the company’s new approach.
Key changes include a reduction in the short-term incentive available to Alumina’s new chief executive, Peter Wasow, compared to what was available to the previous boss, John Bevan.
The STI has been reduced from a maximum of 100 per cent of fixed annual remuneration to a maximum of $400,000. The chief’s long-term incentive has also been reduced. The ability to reset performance rights if hurdles are not satisfied has also been removed.
While it is expected to avoid a second strike, Alumina is again likely to be required to respond to longstanding criticism that it is merely a post-office box for the collection of dividends from the AWAC alumina/aluminium business, which is 40 per cent owned by the company but managed by the 60 per cent owner, Alcoa of the US.
Since last year’s meeting, the AWAC partnership has announced the planned closure of the Point Henry aluminium smelter near Geelong.
Last year, Alumina suffered a no vote of slightly more than 50 per cent, prompting an overhaul of its remuneration report after seeking advice from independent consultants.
Last year’s no vote was 50.07 per cent, forcing Alumina to include a contingent resolution on its notice for today’s meeting for a board spill — to be held within 90 days — in the event that it receives a second strike.
A second strike is incurred if votes against the remuneration report again exceed more than 25 per cent of the votes cast.
Alumina chairman John Pizzey said at last year’s meeting the first strike partly reflected a “general level of discontent’’ among investors as the resources boom of the past 10 years gave way to lower share prices.
Alumina shares traded at $1.31 yesterday, up 25 per cent on its level of a year ago of $1.05. But today’s expected all-clear for the remuneration report is more of a response to the company’s new approach.
Key changes include a reduction in the short-term incentive available to Alumina’s new chief executive, Peter Wasow, compared to what was available to the previous boss, John Bevan.
The STI has been reduced from a maximum of 100 per cent of fixed annual remuneration to a maximum of $400,000. The chief’s long-term incentive has also been reduced. The ability to reset performance rights if hurdles are not satisfied has also been removed.
While it is expected to avoid a second strike, Alumina is again likely to be required to respond to longstanding criticism that it is merely a post-office box for the collection of dividends from the AWAC alumina/aluminium business, which is 40 per cent owned by the company but managed by the 60 per cent owner, Alcoa of the US.
Since last year’s meeting, the AWAC partnership has announced the planned closure of the Point Henry aluminium smelter near Geelong.
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