Whitehaven Coal cops first strike on pay
Over 53 per cent of Whitehaven investors voted against the company’s remuneration report.
Whitehaven Coal has suffered a huge backlash from shareholders over pay, copping a first strike on remuneration amid concerns on short-term incentives and environmental issues while warning an energy crunch underscored the need for more supplies of the fossil fuel.
Over 53 per cent of Whitehaven investors voted against the company‘s remuneration report after several proxy advisers had raised problems on a string of issues prior to its annual general meeting.
The giant protest vote means Whitehaven will take a first strike on pay, which occurs when 25 per cent or more of shareholders vote against a company‘s remuneration report. A second strike next year would trigger a vote on a board spill.
Shareholders were against a decision to pay executives a short-term incentive given Whitehaven suffered three production downgrades at its Narrabri mine in NSW while a string of environmental incidents were also seen at odds with the company’s pay plans.
Whitehaven chairman Mark Vaile told its AGM on Wednesday the challenge of addressing climate change as incredibly complex with changes to global energy trends taking decades rather than years to work through.
The global energy squeeze in Europe and China pointed to the need for further investment in coal, Whitehaven said.
“In a more carbon-conscious world that will need more energy to support growth, we see a role for high-quality coal being used in tandem with advanced generation technology to deliver improved emissions outcomes,” Mr Vaile said. ”The current global energy crunch, while reflecting a wide range of factors, also demonstrates the risks of underinvestment in sectors that will remain vital to economic growth and social development as the world undertakes the multi-decade energy transition.”
Soaring coal prices will likely see the producer resume dividend payments shortly after its decision not to return any funds to shareholders in the 2021 financial year, Whitehaven noted. It expects to pay off its remaining debt within six months amid the price boom.
“No dividends were declared in the 2021 financial year but historic highs in coal prices foreshadow a return to dividend paying status in the near future with the business generating cash at a rapid rate,” Mr Vaile said.
Whitehaven, which operates four mines in NSW’s Gunnedah Basin, told a parliamentary inquiry in June of difficulties securing debt and insurance cover as the finance industry clamps down on its exposure to coal and its high-carbon emissions.
Despite the record price surge, Whitehaven said its average thermal coal price over the September quarter was $US142 a tonne, a 15 per cent discount to the Newcastle average over the three-month period.
Booming thermal coal prices will result in “significant cash generation” for Whitehaven over the coming months with the producer yet to fully benefit due to pricing lags.
Whitehaven shares rose 4 per cent on Wednesday to $2.83.