ISS tells Whitehaven investors to reject miner’s exec pay
Proxy adviser Institutional Shareholder Services has told Whitehaven investors to reject the miner’s remuneration report over concerns that “excessive board discretion” is at the heart of a new executive pay regime adopted last year.
The recommendation from ISS comes as activist investor Bell Rock tries to make executive pay a flashpoint in its campaign to convince Whitehaven to abandon a bid for BHP’s coal mines in favour of returning more cash to shareholders.
Whitehaven CEO Paul Flynn: the miner has stated its desire to grow into coking coal for more than five years. Peter Stoop
Bell Rock’s campaign got off to a rocky start when proxy advisers Ownership Matters and CGI Glass Lewis threw their support behind Whitehaven’s remuneration structure earlier this week, but the note ISS sent to clients on Thursday echoed many of Bell Rock’s concerns.
ISS told clients they should reject Whitehaven’s remuneration report at October 26 annual meeting and vote against a separate resolution that would award grants to Whitehaven chief Paul Flynn under the company’s “single incentive plan”.
ISS noted that executive and board pay at Whitehaven exceeds peer companies, but took particular issue with the single incentive plan, which was introduced last year as a replacement for a scheme that rewarded executives with short and long-term bonuses.
The payout to executives under the plan will be decided by metrics like coal production volumes, unit costs, safety, environmental performance and earnings before interest, tax, depreciation and amortisation.
A big weighting is given to the delivery of “strategic priorities”.
Some of those priorities were named by Whitehaven and relate to progress on the company’s growth projects like Queensland’s
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