Whitehaven flirts with strike after BHP deal ‘gamble’

afr.com:

Coal miner Whitehaven may face a strike at its annual general meeting on Thursday, despite securing BHP’s Queensland coal assets to market acclaim last week.

London-based Bell Rock strongly opposed Whitehaven’s $US4.1 billion ($6.4 billion) deal to buy the Daunia and Blackwater metallurgical coal mines, sealed on Wednesday. Bell Rock will reject Whitehaven’s executive pay scheme at the meeting and hopes to convince other investors to direct their proxies against the board’s recommendation.

The remuneration of Whitehaven CEO Paul Flynn is being targeted by activist investors ahead of Thursday’s AGM. AFR

The Florida State Board of Administration (FSBA) also lashed out against two aspects of Whitehaven’s remuneration, the executive pay scheme, and an equity grant worth almost $3.6 million to chief executive Paul Flynn.

Based on current numbers, the push to vote down the remuneration report will fail.

“It should alarm every single Whitehaven Coal shareholder that management could receive bonuses even if they destroy shareholder value through risky acquisitions,” Bell Rock chief investment officer Mike O’Mara said.

“Paul Flynn has taken a gamble by spending big on two coal mines that BHP didn’t want and under the current system if it goes pear-shaped his bonus is intact.”

Whitehaven’s shares are up 11 per cent since it won the BHP auction.

Proxy adviser Institutional Shareholder Services has already written to Whitehaven investors representing 9.97 per cent of the register urging them to vote against the board’s recommendations. Bell Rock, meanwhile, owns about 4.78 per cent of Whitehaven stock, and has been courting larger retail shareholders.

Concerns about the remuneration policy at Whitehaven include a change last year