Carsales cops first strike on executive pay

Auto classifieds website Carsales has been hit with an investor backlash over executive pay packets, with more than a third of votes going against the company's remuneration report.

The company received a first strike at its annual general meeting held in Melbourne on Friday with 32 per cent of shareholders voting against the remuneration report. More than a half voted against chief executive Cameron McIntyre's long-term incentives package.

Carsales chief executive Cameron McIntyre remains cautiously optimistic.Credit: Tash Sorensen

Proxy firms ISS Governance Services, the Australian Shareholders' Association (ASA) and CGI Glass Lewis all recommended voting against Mr McIntyre's long-term incentive (LTI) grant for the 2020 financial year on the grounds targets had not been clearly disclosed.

In advisory documents circulated to shareholders, ASA raised concerns about the lack of specificity provided about how Carsales structured its LTI non-financial measures.

"We have no way of ascertaining if the non-financial measures are robust with the current level of disclosure."

An ASA spokesman highlighted the firm's concerns with increasing the weighting of LTI non-financial measures from 30 to 40 per cent.

ISS similarly cited concerns about the "excessive" 40 per cent non-financial measures, saying it provided "an excessive opportunity for substantial bonuses in respect of undisclosed 'strategic objectives'".

A Carsales spokeswoman said the issue over the chief executive's pay would be discussed by the board.

Carsales' annual report shows Mr McIntyre took a home a pay packet of $2.1 million for the last financial year.

Following the AGM, Mr McIntyre declined to comment on the failed resolution apart from to say it was "up to shareholders".

A explanatory note with the AGM notice stated the decision to increase non-financial measures to 40 per cent occurred in light of the banking royal commission and to "better reflect the changing executive remuneration climate".

In his speech to shareholders, Mr McIntyre said the company was expecting a gradual recovery in Australian automotive market conditions this financial year, supported by lower interest rates and an improved lending environment, a recovering property sector and recent tax changes.

He said the company had seen a solid start to the year in its core Australian dealer and private businesses.

"Overall, we anticipate group revenue, adjusted EBITDA [earnings before interest tax and amoritsation] and adjusted NPAT [net profit after tax] growth to be solid in FY20," he said.

The election of David Wiadrowski as a director also attracted a strong protest vote of 22 per cent.

Carsales' shares were up 4.4 per cent to $15.64 after the meeting.