Fortescue faces shareholder revolt over ‘special’ exec payments

afr.com:

Fortescue’s shareholders should vote against the company’s remuneration arrangements because millions of dollars of bonuses have been paid to retiring executives with little benefit to the mining and energy giant’s investors, two influential proxy advisory firms have told their clients.

CGI Glass Lewis, in its report ahead of Fortescue’s annual meeting, said the company’s long-serving director Mark Barnaba was no longer independent after 12 years on the board, adding that his “remuneration quantum [was] questionable for an independent non-executive role”.

It has been a turbulent year for the iron ore major, which is controlled by the Forrest family. Fortescue’s shares have almost doubled over the last 12 months, but the company has also lost several executives. Fiona Hicks, the chief executive of the mining division, left in August while three others – Ian Wells, Christine Morris and Guy Debelle – have exited since last August.

Elizabeth Gaines, when she was Fortescue’s chief executive, with Andrew Forrest. Proxy advisors are raising concerns about payments made Ms Gaines and another departed executive. Edwina Pickles

“Moody’s considers elevated turnover at the executive levels over the past several years as credit negative, with the potential to impact strategy and operations, which may have implications on the group’s balance sheet, financing and capital structure,” Moody’s told clients in September.

Elizabeth Gaines also stepped down as Fortescue’s chief executive to resume her role on the company’s board. Fortescue is proposing to pay both Ms Gaines and Mr Wells special recognition payments of $1.98 million and $1 million respectively. Ms Gaines will receive a $795,000 “exertion” payment.

In a report to clients ahead