Gerry Harvey gives activist shareholder a spray as company receives second strike

Harvey Norman has suffered a second strike over executive pay but comfortably dodged a spill vote as shareholders backed the board of the intensely scrutinised retailer.

At the highly anticipated annual general meeting on Wednesday, shareholders were treated to a combative display by executive chairman Gerry Harvey as he faced off against "agitator" shareholders, including corporate activist Stephen Mayne.

Chairman Gerry Harvey and wife, chief executive Katie Page, at the company's AGM on Wednesday.Credit: Janie Barrett

Mr Mayne had self-nominated for a board seat at the company and was subjected to an extraordinary spray and accusation from Mr Harvey prior to investors voting on the resolution.

"Are you a sexual predator?" Mr Harvey asked Mr Mayne. "No, he's not. Or he's not admitting it."

The question was in relation to a list published by Mr Mayne at his former publication Crikey in 2001, ranking female politicians by their attractiveness. The former journalist apologised for the publication of the list last year.

Speaking to The Age and The Sydney Morning Herald, Mr Mayne labelled Mr Harvey's accusation the "most abusive experience" he had seen at more than 500 AGMs, noting he had been "gagged" and prevented from responding to the accusations by Mr Harvey.

It was shareholders sending a real message for Gerry to lift his game on governance and transparency.

Corporate activist Stephen Mayne

"It was a remarkably vitriolic and personal," he said. "It's complete recalcitrance in focusing on the corporate governance and transparency issues."

Proxy advisers and shareholder groups have continued to raise issues with Harvey Norman leadership in relation to the prominent retailer's operations.

These include the lack of independent directors on the company's board, its reluctance to individually detail and value its $3 billion property portfolio, and millions lost to non-retail endeavours including a dairy farm and a farmers market.

Shareholders continued their protest against these issues, registering a 47.58 per cent vote against the company's remuneration report, slightly less than the 50.6 per cent opposition it suffered last year, but well above the 25 per cent threshold required to trigger a second strike.

However, the following board spill vote attracted just 11.21 per cent of shareholders voted in favour of the spill motion, falling well short of the 50 per cent mark required. Additionally, 91.07 per cent of voting shareholders backed the re-election of chief executive Katie Page.

Speaking to The Age and The Sydney Morning Herald, Mr Harvey acknowledged the retailer would need to make changes to prevent a third strike next year, but did not specify precisely what would change.

"We can put two women on the board tomorrow and that gets rid of a lot of our problems," he said. "But that's doing something to appease somebody rather than doing something that is good for the company."

The 80-year-old founder said the company's remuneration committee, chaired by non-executive director Kenneth Gunderson-Briggs, would be responsible for making changes to ensure the company does not see a third strike.

"Whatever changes they make, I'll go along with. But I'm more interested in the big picture."

Shareholders also continued their string of protest votes against company directors, including a 28 per cent vote against executive director David Ackery and a 15 per cent opposition to Mr Gunderson-Briggs.

Despite backing by proxy firms Ownership Matters and ISS, Mr Mayne garnered just 8.24 per cent of eligible votes in support of his board tilt.

However the vote is one of his most successful in recent times, marking the highest level of support since his 2013 tilt at the AFIC board, which gained 16.4 per cent support.

"It was shareholders sending a real message for Gerry to lift his game on governance and transparency," he said.

The company also provided a trading update, showing its comparable store sales were up 1.7 per cent for the first quarter. Sales for its local and international store network totalled $2.44 billion, up 2 per cent on the same period a year ago.

Shares closed down 0.69 per cent at $4.29