The board of construction contractor Leighton Holdings is expected hear loud shouts of disapproval from investors at its annual meeting tomorrow over the company’s latest pay report.
Investors are believed to be angry over what they consider excessive cash bonuses, fixed pay and large termination payments for senior management.
According to reports, Leighton chief executive Wal King’s pay packages over the past six years have totalled $75 million, with the majority being made up of cash payments rather than equity.
Influential corporate governance risk advisory groups RiskMetrics and CGI Glass Lewis have both released reports to their members recommending they reject Leighton’s remuneration report, saying that it does not reflect the best interest for shareholders and the size of the packages is excessive given local market standards.
CGI Glass Lewis was unavailable for comment when contacted by MINING DAILY.
Both RiskMetrics and CGI Glass Lewis disagree with the fact that King’s remuneration features cash bonuses that are not directly linked to performance levels.
With a total pay package for this year of $12.6 million, including a $5 million bonus and a deferred incentive of $3.2 million, King is reportedly among the five highest paid chief executives in Australia.
In addition, King’s contract stipulates that he will receive a fixed retirement benefit of $12.6 million, $4.9 million for a three-year non-restraint period, and up to $5 million for achieving a satisfactory transition to a new team by the end of the following year.
Leighton’s profits for this year saw a 28% drop on the previous corresponding period.