Cleanaway first strike as payments raise a stink
Investors of the waste giant have voted against its executive payments despite ‘extensive’ efforts by chairman Mark Chellew and some directors to address concerns.
Waste giant Cleanaway has recorded the first strike against its executive payments, with a 25.5 per cent protest vote by investors at its annual meeting on Friday.
Chairman Mark Chellew had flagged the possible vote against the remuneration report in his speech, released to the ASX before the meeting.
The board “is aware that some shareholders disagreed with the board’s assessment of certain remuneration matters this year,” he said.
The “no” vote on the remuneration report came despite Mr Chellew and some fellow directors engaging “extensively” with shareholders and proxy advisors to address their concerns.
“The significant events and challenges of FY22 made our assessment of executive performance more difficult and we acknowledge that some shareholders felt we didn’t get the balance right,” Mr Chellew said.
While the resolution was carried on the 74.5 per cent “for” vote, another strike against it at the annual meeting in 2023 could force a board spill.
Chief executive Mark Schubert, who left Origin to joined in August 2021 – following a tumultuous period for Cleanaway under former chief Vik Bansal – took home $3.6m in total remuneration in financial year 2022, including a fixed salary of $1.6m and $970,902 in short term incentives.
For the current financial year, his total package is now set at up to $5.7m, subject to performance milestones and company targets.
Votes against the $5.8bn group’s remuneration policy have been growing in recent years – “no” votes increased to 11.1 per cent at the 2021 annual meeting, up from 10.26 per cent in 2020.
Mr Chellew has promised to “work constructively” with shareholders to deliver equitable outcomes.
Operationally, Mr Schubert told investors the group is on track for its FY23 guidance of underlying earnings before interest, taxes, depreciation and amortisation to range between-$650m and $690m – higher than its FY22 result of $581.6m.
“Based on current operating conditions and a balanced assessment of the opportunities and risks the business is tracking towards the midpoint of this range,” Mr Schubert said.
“However, the material factors that can influence the outcome are volumes into post collections assets, labour availability and commodity prices.”
He said the inflationary pressures in the broader economy have increased since its August update.
“We are continuing to see a challenging labour market, which impacts cost and availability of labour. Managing these impacts by passing on the effects of inflation to our customers where possible and attracting and retaining labour have been a key focus for the year to date.”
Shares in the potential takeover target are down nearly 2 per cent to $2.58 at 2.30pm AEDT.
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