Elders cops first strike on remuneration report

Elders chair Ian Wilton has defended a decision to reappoint managing director Mark Allison after the company copped a resounding first strike on pay.

Elders managing director Mark Allison.

Elders chairman Ian Wilton has defended the company’s decision to reappoint managing director Mark Allison on a boosted pay packet after shareholders delivered a resounding first strike on the company’s remuneration report.

Mr Allison ditched his retirement plans in June, after the Elders board convinced him to stay on and hoisted his fixed salary by more than $400,000 while throwing in a $1m bonus if he stays on until 2025.

Mr Allison had earlier, in November 2022, announced plans to retire, having joined the farm and rural property services company in 2009, initially as chairman before becoming managing director in 2014.

On the day his planned retirement was announced, the company’s share price fell 23 per cent.

Addressing shareholders at the company’s annual meeting on Thursday, Mr Wilton said the board had determined that Mr Allison was the best candidate to lead the company amid the uncertainty facing the industry.

“It was considered delivery of Elders’ systems modernisation and supply chain optimisation projects may have been jeopardised by a change of leadership at this critical stage,” he said.

“In addition, delays in the appointment of a successor would continue to create uncertainty in the market at a time when El Niño and broader economic conditions were beginning to impact our customer purchasing patterns and business outlook.

“In the process of determining a successor for Mr Allison, it was also clear that the candidate pool and market generally had moved in relation to remuneration expectations.

“The board felt it was appropriate to adjust Mark’s remuneration arrangements and to put in place a package that has been assessed for market competitiveness, to ensure that his services were retained beyond his planned retirement.”

Close to 63 per cent of shareholders rejected the company’s remuneration report at Thursday’s meeting, easily meeting the 25 per cent threshold required to instigate a first strike.

A second strike next year could force a spill of the board.

As part of his reappointment, Mr Allison’s base pay packet increased from $1.09m to $1.5m, with two retention bonus payments of $500,000 a year if he is still in the role on June 1, 2024, and June 1, 2025.

However a proposal to award Mr Allison service rights worth more than $1.3m if he stays on until 2025 was rejected by shareholders at Thursday’s meeting, with close to 64 per cent of shareholders voting down the resolution.

Mr Wilton told shareholders a succession plan to find Mr Allison’s replacement was ongoing.

“It will continue to focus on the further development of suitable internal candidates, and the addition of new talent to the executive leadership team to complement the existing skill base,” he said.

“This is in addition to the external search process.”

Elders reported underlying earnings before interest and tax of $170.8m in the 12 months to September, down 26 per cent from the previous year, but the second-best result in the past decade.

Mr Allison has been credited for turning around the fortunes of Elders during his rein, and is continuing to diversify the business in order to make it more resilient to seasonal and market fluctuations.

On Thursday, Mr Wilton told shareholders that strategy had resulted in “solid earnings, showing the value of a strategy that prioritises diversification in a sector prone to the effects of external fluctuations in commodities and climate”.

Elders shares closed 4 per cent higher on Thursday at $7.55.