The former boss’s big payout has led to Adelaide Brighton getting a first strike on its remuneration report

Adelaide Brighton has received a protest vote against its remuneration report over incentives paid out to it former chief executive, but the board is sticking by its decision.

• AdBri uses discretion to bolster boss’s payout
• Profit warning for Adelaide Brighton

Adelaide Brighton has received a protest vote against its remuneration report over incentives paid out to it former chief executive, but the board is sticking by its decision.

The Adelaide Brighton board used its discretion to pay out some of former chief executive Martin Brydon’s short and long term incentives, boosting his pay packet to $5.8 million in his last year on the job.

The company says it was an unusual situation, with Mr Brydon asked to stay on to ensure an orderly transition to a new boss - which he did, with the board deciding to pay out some incentives despite profit targets being missed. That has translated into a “first strike” for the company, with just more than 29 per cent of votes cast before the meeting opposing the remuneration report.

Outgoing chairman Zlatko Todorcevski said after the meeting “I wouldn’t change a thing”.

He said the vote’s outcome was “disappointing” but said it was a unique situation the company found itself in.

Mr Todorcevski said the main concerns raised by shareholdershodlers were around the full vesting of 2016 and 2017 long term incentives, but said he could not divulge who had voted against the report.

The Australian Shareholders Association voted its 1.75 million or so proxies in favour of the report but said it would review that decision in light of the vote’s outcome.

AdBri also welcomed incoming chairman Raymond Barro, now one of three Barro group associates, including his sister Rhonda, on the AdBri board. Barro has been using the creep provisions of the Corporations Act in recent years to slowly build its stake in AdBri, and now owns 43 per cent of the company.

Mr Barro would not comment after the meeting about when or if the company would go past the 50 per cent threshold, and what that might mean from an operational or management position if it did so.

He refused to comment on whether the Barro group, which operates in the same fields as AdBri, is doing better or worse in the current challenging environment for building materials companies.

He repeated previous comments that it might make sense for the companies to merge at some stage but said “this may or may not happen and there are no discussions going on at the moment’’.

AdBri this week issued a profit warning, saying its full year result would be 10-15 per cent down on last year’s $190.3 million. The shares fell a further 3.3 per cent today, to $3.63. The 12 month high of $6.96 was reached on July 10.

AdBri’s new chief executive Nick Miller, who started in January, told the annual meeting in Adelaide that there was expected to be “continued softening in residential construction’’.

“Particularly as construction activity in the multi-residential segment abates, following completion of projects already in the construction pipeline.

“Increased competition from cement imports, driven by new market entrants, is placing pricing pressure on our cement businesses in South Australia and Queensland.

“Raw material costs, in particular imported clinker and aggregates have risen, placing further pressure on margins.

“Despite this, the long-term outlook for construction materials remains robust, driven by population growth and ongoing bipartisan support for infrastructure investment.’’

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