Woolworths hit with first ever strike against remuneration report

The retailer has been hit with its first ever strike against its remuneration report, as its former boss Roger Corbett pushed the board on its attitude over the Endeavour brawl.

Woolworths has been hit with its first ever strike against the adoption of its remuneration report, as former boss Roger Corbett pressed the board to explain its decision to vote against the election of rebel candidate Bill Wavish to the board of its offshoot Endeavour Group.

At the retailer’s annual shareholder meeting on Thursday, chairman Scott Perkins also defended its decision to donate $1.55m to the ‘Yes’ campaign for the voice referendum, arguing the money was handed to organisations that helped to educate the population about the referendum and to understand the proposition.

The Woolworths meeting gave the floor to a number of issues, some directly related to the retailer’s operations including the recent deaths of two Woolworths workers that might have contributed to the first strike on the remuneration report, and others less related to its business such as the corporate civil war within drinks and pubs giant Endeavour.

If Woolworths gets a second strike next year, it will lead to a spill of the board.

Mr Perkins revealed lodged proxy votes which showed a 28.02 per cent vote against the adoption of the remuneration report, clearing the hurdle for a 25 per cent against vote to score a first strike. There was a 70.78 per cent vote in favour of the resolution relating to the remuneration report.

It appears some large institutional investors were disgruntled over the way Woolworths recorded the two workplace fatalities and although Woolworths cut executive short term bonuses by 10 per cent as a first stage response to the deaths it might have fallen short of some shareholder expectations.

Mr Perkins explained to shareholders as he spoke on the remuneration report resolution that its remuneration framework also includes a safety metric for injuries but that only relates to injuries and near misses as the board did not consider it appropriate to apply a formulaic weighting on any human life.

“Any fatality must be considered separately and with an understanding of all the circumstances. As I mentioned in my address, we are awaiting the conclusion of regulatory investigations into the two recent fatalities,” he said.

Mr Perkins said Woolworths had consulted widely with shareholders and proxy advisers and four of the five proxy advisers together with the majority of its shareholders have supported the board’s approach.

“However, some shareholders believe we should have changed our remuneration framework and made further pre-emptive adjustments before the investigations are concluded. As a result, we have seen a vote against the remuneration report in excess of 25 per cent of those voting today.

“However, we acknowledge, and will reflect on this feedback and consider whether adjustments to our remuneration framework are appropriate.”

At the meeting, Mr Corbett pushed the board to explain why it is “supporting the status quo” by voting its shares in drinks and pubs group Endeavour in support of its directors.

Mr Corbett said Woolworths had lost considerable money on its 9.1 per cent stake in Endeavour, which owns Dan Murphy’s, BWS and 354 pubs, and asked how bad did it have to get at Endeavour and its performance before Woolworths uses its large stake in the company to engineer change.

“Your board has chosen to support the status quo, I think your shareholders are entitled to know the reason you chose that because the status quo is so bad, Woolworths has lost circa $200m on the investment and I think there are a lot of us here who are Woolworths shareholders and Endeavour shareholders,” he said.

“We, sir, have lost a lot of money.”

Mr Corbett, who was the boss of Woolworths between 1999 and 2006, is supporting rebel director candidate for the Endeavour board, former Woolworths executive Mr Wavish.

Mr Wavish has also secured support from Endeavour’s largest shareholder, pubs billionaire Bruce Mathieson Senior.

On Wednesday, Woolworths announced it would use its 9.1 per cent stake in Endeavour to vote against Mr Wavish and support the board’s recommendations on the resolutions for the AGM later this month.

“What are the circumstances, how much worse does it need to get than a 40 per cent reduction in the (Endeavour) share price for Woolworths to use its 9 per cent to protect its own investment, but alas sir, our investment?”

Mr Perkins said he had met with the Mathieson family as well as Mr Wavish, had communicated with the Endeavour management team but that it was appropriate for Woolworths to support the board.

He said, however, “there was work to do” at Endeavour and Woolworths looked forward to a better return on its investment in the company.

Originally published as Woolworths hit with first ever strike against remuneration report