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(generated from captions) Welcome to the program. real or perceived - Executive excess - among shareholders has always ignited passions on the the shop floor and today, the issue boiled over

at newspaper publisher Fairfax. A proposal to cut 55 jobs response from the staff. to boost revenue drew a fiery the $4.5 million golden handshake They raised questions about Fred Hilmer for former chief executive

for his replacement. and the $1.2 million sign-on bonus to voice their concerns Investors will get a chance

until its annual meeting next month. about salaries at Fairfax in the corporations law A new provision to vote on company pay structures. gives shareholders the opportunity And although it's non-binding, some discomfort where it hurts. the new mechanism is causing Emma Alberici reports. Finance editor

Shareholder meetings in the main

used to be polite affairs, a chance

for the board to talk up the

company's prospects. There was

rarely a question asked and

resolutions were passed without too

much fuss. For investors, it was

the once a year opportunity to

Mingwell management over a cup of

tea and nibblies. Now, are making tea and nibblies. Now, shareholders

are making a noise. From the Big tea and nibblies. Now, shareholders

Apple where an ex-pat Australian

company is hearing it but

to ignore hard questions about pay. company is hearing it but continuing

Like many companies with a very

strong dominant shareholder there's

always the risk that the rights of

minorities will be abused. To the

Apple Isle where Tasmania's biggest

company is also hearing grumblings

it off about pay but the board can't shrug

it off as easily. I think they will about pay but the board can't shrug

on this occasion institutional face a substantial protest vote from face a substantial protest vote

shareholders today because they

haven't got with the program.

The annual meeting of the Gunns

Group is often fiery and

controversial, but today the

Tasmanian logger had more than

greenies to contend with.

Shareholders armed with new rights

under corporate law, voiced their

anger at a comfy director

scheme. The longer they stay anger at a comfy director retirement scheme. The longer they stay on anger at a comfy director retirement

board, the fatter the payout. Most

companies on the Australian Stock

Exchange have now done away with

retirement benefits for non-executive directors, but Gunns

is sticking to its guns. I think we

have to listen to what other

people's views are and I think

prepared to do that and let's people's views are and I think we're

it there and that we will deal with prepared to do that and let's finish

it at the next board meeting.

You could have a situation You could have a situation where it at the next board meeting.

directors don't exercise their

ultimate sanction and walk from a

board if they're unhappy about the

direction of a board. So by having

a retirement plan in place, the

argument may be that it's a

potential pay-off to remain silent

or sort of follow the group-think

a specific issue confronting the or sort of follow the group-think on

board. Phillip Spathis heads board. Phillip Spathis heads up the a specific issue confronting the

Australian Council of

Investors which represents 34 super Australian Council of Superannuation

funds that together manage an

investment pool worth $110 billion.

They held the bulk of the 15

shares voted against the Gunns' They held the bulk of the 15 million

remuneration report. Not enough

a majority, but it sent a clear remuneration report. Not enough for

message nonetheless. The votes are

non-binding but anything more than

significant 20% against a motion is considered

significant enough to force a 20% against a motion is considered

change. I think they were taking it

very seriously and the majority of

companies have put quite a

reasonable effort into providing

appropriate disclosure, clarity and

explanation about the remuneration

arrangements and have gone to some

lengths to explain the link between

pay and performance. Despite the

fact that it's non-binding it does

send a

send a very strong message to fact that it's non-binding it does

who would be listening and it would send a very strong message to boards

be an embarrassment to have a

board-sponsored resolution put up

against which there's such a high

vote . The dominoes are falling all

over the big end of town. The

Australian Gas Light Company's ignited fury at Australian Gas Light Company's board

ignited fury at its AGM by Australian Gas Light Company's board

chief executive Greg Martin be ignited fury at its AGM by proposing

a long-term incentive plan that chief executive Greg Martin be given

awarded him bonus shares in the

company after just 12 months.

I don't understand how you can call

such a short-term offer a long-term

incentive scheme. When it comes to

executive pay shareholders are most

annoyed when the boss appears to be

they have rewarded for poor results, and when

they have no or a low performance rewarded for poor results, and when

hurdle to jump in order to receive

the so-called incentive-based part

of the package. But what's become

the biggest beef among shareholders

is the sheer number of zeros

attached to an individual's pay

slip. For the past three years,

Australia's corporate leaders have

seen their pay jump by more than

a year. That's about 10 times the seen their pay jump by more than 20%

rate of inflation. Macquarie Bank rate of inflation. Macquarie Bank a year. That's about 10 times the

is the country's most generous

employer by far. 52% of the

investment bank's revenue is given

back to the staff. Chief executive

Alan Moss last year received $18

million. $61 million is shared

between just five people in

management. When shareholders are

getting double their money in the

space of a year, surely the

executives the people who make that

happen deserve to be rewarded? executives the people who make that happen deserve to be rewarded?

Yes,but we have to ask ourselves

other questions. Do we think any

businessman in Australia is worth

$17 million a year? I don't think so. Lucky

so. Lucky for the Macquarie Bank

board their meeting this year came

three months before the legislation

required Australian companies to

required Australian companies to put their remuneration reports to a

vote. But for relative small fry

like the investor Property Group, vote. But for relative small fry like the investor Property Group,

like the investor Property Group, no such luck. Do you think it's important that shareholders get the

opportunity to vote about the

remuneration? I certainly do.

Investor Property Group owns and

manages a number of prominent real

estate sites in Australia's capital

cities. It used to be one of

Westpac's property trusts before it

was spun off. Among all the

gatherings so far this year, the

vote against their salary packages

has been the strongest, at vote against their salary packages has been the strongest, at 35%.

You see chairman say these

You see chairman say these long-term incentive scheme also align

shareholders and management

interests and they don't, because

shareholders have to take the down

side if the market goes down, but

the executives on these sorts of

plans ride only the upside.

plans ride only the upside. Chairman Ian Payne found it difficult to

justify the way his group rewards

its executives. On top of justify the way his group rewards its executives. On top of their

base pay, they're given loans with

which to buy shares in the company.

The loans are interest-free and

what's phone known as non-recourse.

In other words those lucky enough

In other words those lucky enough to get them never have to pay them

back. They'll get more financially

if the share price is worth more?

Absolutely, yes. But it's not as

though they could get negative?

Well no, they can't lose money on it. They can lose a potential Well no, they can't lose money on it. They can lose a potential

upside, which was the objective of

the whole scheme. So what are the

performance hurdles that have to be

reached before the employees get

these shares? Well they're not a

long-term incentive scheme in that

sense. I know there are current

models of long-term incentive

schemes that offer the potential

schemes that offer the potential for reward for out performance. Our

scheme is not

reward for out performance. Our scheme is not of that nature. I

think it's probably right that we

ought to be considering it in that

context and as I've indicated at

context and as I've indicated at the meeting we will take that on board

and have a look at what we might do.

Investor heard the message loud and

clear and yesterday packaging group

Amcor - already under fire for an

ACCC investigation on allegations

ACCC investigation on allegations of price fixing and collusion - backed

down on a lucrative options package for its new

down on a lucrative options package for its new chief executive Ken

Mackenzie. The company's biggest

investors had knocked on the door

and warned them of an otherwise

embarrassing backlash at the AGM.

Since July of this year there very

somewhere in the order of about 100

remuneration reports that we have

reviewed and I'd say about 20 to 25

remuneration reports let's say were

on our radar screen

remuneration reports let's say were on our radar screen as inadequate.

We have written to a number of

We have written to a number of those corporations and we've actually met

with a number of those corporations

to express to them our specific

concerns and in the main, we've had

some very positive sort of feedback

and responses. The real strength of

the new law in changing company

behaviour on pay will be revealed

next year in the number of annual

next year in the number of annual reports that actually reflect the

opposition to a salary arrangement