Reuters reported that 39% of BlueScope Steel shareholders have rejected the remuneration report.
The resounding No votes reflect the growing public disgust with corporate executives enjoying fat bonuses while the ordinary Australian have to tighten his belt. In the case of BlueScope, the firm axed 1,000 jobs in August while the company registered AUD 1 billion loss in the year to June 2011.
Previously, at least 25% of shareholders of Crown, Pacific Brands, Perpetual, Emeco Holdings and Cabcharge also thumbed down the remuneration reports of their respective boards. New remuneration laws in Australia count a minimum 25% of No votes as one strike against the company under the rules' two strike policy.
BlueScope investors rejected the pay report despite pleas for support from Ms Diane Grady, the chairwoman of the Remuneration Committee. She explained that the executives have earned their bonuses because they aggressively cut costs.
She cited the shuttering of the firm's Port Kembla blast furnace and Hastings hot strip mill which saved up to AUD 500 million and avoided AUD 450 million in carbon taxes.
Ms Grady insisted the executives are not a greedy bunch and pointed out that the company was just caught by a bad combination of poor demand, high Australian currency and fast rise in raw material prices. She added that "If our executives come to believe that no matter what they achieve, there will be no short-term incentives, it will be difficult for us to retain them, and replacing them could wee be even more expensive."
However, Australian Shareholders Association Chief Mr Van Kolesnikoff countered that the bottom line was that BlueScope suffered a share price drop ranging from 70 cents to AUD 11 in recent years, which is a reflection of poor management.
Mr Paul O'Malley MD of BlueScope, who was awarded AUD 720,000 in bonuses and incentive payments over a AUD 1.25 million base pay, disclosed that harder days lie ahead for the steel industry due to structural changes in international steel movement since capacity utilization remains below 80% and a number of major steel companies in Europe have either shuttered or mothballed blast furnaces the past few months.
(Sourced from www.ibtimes.com)
