Goodman dodges second strike and heads down data centre path

The industrial property company’s share-based schemes drew some ire as the chief executive received about $14m, while warning the year ahead would be tough.

Greg Goodman received $14.16m in 2023, including about $12.8m in share-based performance rights. Picture: John Feder

Industrial property powerhouse the Goodman Group has avoided a second strike in a row against its pay practices and flagged it will push deeper into the data centre market.

The company was hit by a protest vote against its remuneration report but it did not reach the 25 per cent mark, despite two proxy houses recommending against its practices and a strike last year.

Greg Goodman, CEO of Goodman Group, received $14.16m in 2023, including about $12.8m in share-based performance rights.

The chief executive warned that coming into 2024, the company expected continued disruption and volatility in real estate markets globally but said the company was well positioned to not only withstand these challenges, but capitalise on opportunities after slashing debts.

“The opportunities in data centres are going to be an increasing contributor to our growth, as escalating technology, and computer processing power requirements, generate unprecedented demand,” he said

Goodman switched up some pay policies that drew investor ire last year but has also won shareholder backing as its performance has held up as its expanded its global logistics empire while many property rivals have stalled.

Chairman Stephen Johns said it was a feature of Goodman’s remuneration that a very large portion of executive pay was put “at risk” but the proxy houses have taken issue with the reporting of operating earnings, excluding share based payments to staff.

Ownership Matters and ACSI criticised the practice but Mr Johns said that it had “stood the test of time” and pointed to the group’s results. He also argued that the market valued the stock on a multiple of operating cash flow profit.

More than 87 per cent of proxies backed the remuneration report and Mr Johns noted that after getting a strike last year the company engaged with a” significant number” of institutions and they had “continued confidence” in the remuneration structure.

But it made changes including cutting the short-term incentive component for fiscal 2023 by 10 per cent and cutting the quantum of the performance rights for the long-term incentive plan for this financial year by 10 per cent. It also set challenging operating earnings hurdles.

“It is important to note that these challenging earnings targets were set in the context of the deteriorating global economic and operational environment, and the group’s exceptional results in the past two years which had established a much higher earnings base from which to grow,” Mr Johns said.