Grant Fenn should be accountable for Downer woes, proxy groups say

afr.com:

Downer EDI is expected to receive a protest vote against its remuneration report at its annual general meeting this week after proxy groups questioned how the board would handle outstanding share rights awarded to former chief executive Grant Fenn.

The contractor was hit with a first strike at last year’s AGM. Almost 56 per cent of votes were cast against the pay resolution after Downer’s board paid 65 per cent of executives’ potential total short-term bonuses despite a drop in annual net profit.

Proxy advisers are eager to see how Downer EDI will handle rights awarded to former chief Grant Fenn.  Louise Kennerley

The strike (when at least 25 per cent of votes cast are against the remuneration report) was just the start of a turbulent 12 months for Downer. It subsequently revealed “accounting irregularities” followed by two profit warnings, which pummelled the contractor’s shares and forced a shake-up of the board.

Chairman Mark Chellew was replaced by non-executive director Mark Menhinnitt in early March.

Downer has also been caught up in a NSW corruption inquiry – which is still taking submissions and may not report until mid-2024 – and sunk to a $386 million annual loss.

Mr Fenn retired as CEO in February but is being paid out 12 months’ salary.

He earned a $1.38 million salary in fiscal 2023 and also holds 584,317 rights under a long-term incentive plan, with just over a quarter eligible for vesting in fiscal 2024 pending board approval. Another 841,339 rights linked to 2022 and 2023 incentive schemes will be tested at the end of fiscal 2024 and fiscal 2025.

Institutional Shareholder Services has recommended investors vote against Downer’s remuneration report. The board has not disclosed how it will treat long-term