Whitehaven activist targets executive pay but proxies back board

afr.com:

Proxy advisers have backed Whitehaven Coal’s new approach to executive pay as London hedge fund Bell Rock made remuneration the new focus of its activist campaign to stop Whitehaven acquiring BHP’s coal mines.

Bell Rock has this year lobbied Whitehaven to spend its $2.65 billion cash pile on shareholder returns rather thancoal mine acquisitions and will escalate that campaign over the next two weeks with newspaper advertisements and direct mailouts to shareholders ahead of Whitehaven’s annual shareholder meeting on October 26.

Activist investors are targeting the bonuses that Whitehaven plans to pay Paul Flynn. Dion Georgopoulos

Bell Rock has urged Whitehaven shareholders to vote against the miner’s remuneration report, the re-election of three directors and also reject a resolution that would grant more than half a million shares worth almost $3.6 million to Whitehaven chief executive Paul Flynn.

Bell Rock has particularly criticised the executive pay structure adopted by Whitehaven last year, when the miner combined its traditional short and long-term incentives into a “single incentive plan” (SIP).

The SIP did away with “relative total shareholder return” (TSR) as an influencing factor on executive bonuses in favour of metrics aligned to coal production volumes, unit costs, safety, environmental performance and most of all, earnings before interest, tax, depreciation and amortisation (EBITDA).

More than 92 per cent of Whitehaven shareholders voted in favour of the remuneration report – which included the new SIP structure – at last year’s shareholder meeting, but the awarding of shares to Mr Flynn under the SIP requires shareholder approval again at this year’s meeting.

Bell Rock chief investment officer Michael