Penfolds owner Treasury Wine hit with first strike over pay

afr.com:

Penfolds owner Treasury Wine Estates was hit with a 46 per cent protest vote over executive pay on Monday after the board allowed share-based incentives to chief executive Tim Ford on the basis that no-one could have foreseen the heavy profit drop from punishing wine tariffs imposed by China.

It was the first time in its 12-year history as a standalone ASX company that Treasury Wine was dealt a first strike around remuneration, meaning votes cast against the resolution exceeded the 25 per cent level necessary to qualify as a strike.

Treasury Wines boss Tim Ford. Eamon Gallagher

Chairman Paul Rayner, who retired from the position on Monday after 12 years, was defiant in the face of the heavy protest vote as three proxy advisory firms admonished Treasury over the vesting of $2.26 million of shares under the long-term incentive scheme linked to the 2020-21 financial year.

“We think we made the right call. We think we are being even-handed,” Mr Rayner told shareholders.

Mr Rayner is handing over the reins as chairman to John Mullen. Mr Rayner praised Mr Ford’s handling of the sudden tariffs imposed by China in late 2020, which caused 35 per cent of Treasury’s profits to disappear almost overnight. Treasury Wine diversified into other markets including Malaysia, Thailand and Singapore.

Mr Ford told the meeting luxury wine sales were strong and drinkers were expected to keep spending on higher-priced premium wine despite tougher economic times.

Trading in the September quarter was in-line with the group’s expectations, with consumers buying at the upper-end of the wine segment not cutting back. This is in contrast to a squeeze in the commercial wine sector in the under-$10 a bottle price bracket, which Treasury Wine is