Revolt over performance rights as King’s reign ends at Origin

Former Origin Energy MD Grant King was hit by a small protest vote on performance rights at his final AGM.

Outgoing Origin Energy Managing Director and CEO Grant King.

Former Origin Energy managing director Grant King was hit by a small protest vote about performance rights at his final annual general meeting in Sydney on Wednesday.

Sixteen years after overseeing Origin’s spin-off from Boral, Mr King handed the reins to his head of energy markets, Frank Calabria, having grown the company from a $700 million market cap to its current $9.9 billion.

Having run Boral Energy since 1994, he has been at the helm of the business for 22 years.

At its peak in 2011 as it prepared to approve the Australia Pacific LNG plant, Origin had a market cap of $17.6bn.

But more recently, the oil price downturn and the debt Origin took on to finance its share of the $24 billion APLNG project led to a $2.5bn equity raising, the suspension of the company’s dividend and a fall in share price.

At Wednesday’s AGM, 16 per cent of shares voted were against a resolution to grant Mr King performance shares and options, meaning the resolution still passed easily.

All other resolutions at the meeting, including the remuneration report, sailed through with 97 per cent or more in favour.

Chairman Gordon Cairns was effusive in his praise of Mr King’s role as the driving force of Origin, a company that produces power from coal, gas and renewables, retails power and gas and is now an LNG exporter.

“Grant was the genius who saw the strategic benefits of combining the contestable parts of the energy value chain, allowing us to link energy sources with the end user, he was the visionary who realised that the fuels of the future were gas and renewables,” Mr Cairns said.

“He has been a great leader for our company, combining huge intellect with modesty and absolute integrity. I have never worked with better.” At the meeting, Mr Cairns said he did not know when the dividend would be reinstated.

He said this would depend on how much earnings improved this year — which is mainly reliant on oil prices — and how much debt can be paid down.

Origin maintained guidance of a 45 per cent to 60 per cent boost in earnings before interest, tax, depreciation and amortisation and said it would provide net profit guidance in February.

Mr Cairns said an oil hedging plan put in place last year had been extended, with 15 million barrels of oil hedged with a floor price of $US45 in 2017-18, at a cost of $35m after tax.