Activist target Whitehaven Coal suffers first strike
Whitehaven Coal suffered a first strike against its executive pay regime after 40.6 per cent of investors voted against the miner’s remuneration report at a shareholder meeting in Sydney on Thursday.
The protest vote means chairman and former deputy Prime Minister Mark Vaile and the rest of the Whitehaven board face a spill motion next year if a second strike is dealt. A strike requires 25 per cent of votes cast against the executive pay scheme.
Whitehaven is set to acquire the Daunia (pictured) and Blackwater mines in Queensland.
Activist investor Bell Rock Capital Management urged fellow shareholders to vote against the remuneration report out of concern that the structure adopted last year would incentivise Whitehaven managing director Paul Flynn to deploy capital buying new mines.
Mr Vaile said the protest vote was disappointing given shareholders had overwhelmingly embraced the remuneration structure at last year’s meeting. A separate resolution over incentive payments to Mr Flynn suffered a 38.5 per cent protest vote.
A resolution to re-elect Ray Zage to the board was opposed by 24.6 per cent of votes.
Bell Rock was allowed to vote at Thursday’s meeting after the Takeovers Panel rejected Whitehaven’s eleventh hour bid to have the fund manager disqualified from voting.
Whitehaven told the panel that Bell Rock had privately boasted it controlled about 11 per cent of the miner’s shares; more than double the level that Bell Rock conveyed in an October 12 letter to Whitehaven shareholders.
The panel is yet to say whether it will compel Bell Rock to clarify how many shares and derivative interests in Whitehaven it controls.
Bell Rock has lobbied Whitehaven to abandon plans to spend billions buying two BHP coking coal mines and instead return its $2.45 billion cash pile to shareholders.
The pressure did not change Whitehaven’s course, with Mr Flynn agreeing last week to pay up to $US4.1 billion ($6.4 billion) to acquire the Daunia and Blackwater mines in Queensland.
Glass Lewis and Ownership Matters, two influential proxy advisory firms, had recommended that Whitehaven shareholders vote in favour of the remuneration structure on Thursday. Institutional Shareholder Services told Whitehaven shareholders to reject the remuneration report.
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