Bottled-up anger comes to a head at Foster's meeting
FOSTER'S shareholders showed no signs of jubilation yesterday over the $12 billion takeover offer from SABMiller, flaying directors for selling out to foreign owners.
FOSTER'S shareholders showed no signs of jubilation yesterday over the $12 billion takeover offer from SABMiller, flaying directors for selling out to foreign owners.And they almost scuttled $5.2 million in performance rights for new chief executive John Pollaers. In what was most likely the final annual meeting for the beer group, vocal and sometimes emotional shareholders cheered and heckled as chairman David Crawford tried to explain the board's reasons for accepting SABMiller's bid. One investor was brought to tears over the demise of Foster's, and others attacked the short-term thinking of larger shareholders such as superannuation funds and institutions for supporting the bid.At times calling the board "disgraceful" for their decision to sell the company, others yelled abuse from the back of the hall. Many questioned whether directors had the confidence to run Foster's as an independent company, and argued that the bid from SABMiller in September, priced at $5.5325 a share, greatly undervalued the long-term value of the group and its highly attractive beer assets. The bid has the full support of the board, with shareholders to vote on the deal later this year.Feeding into the mood of revolt against pay and bonuses for executives in public companies this reporting season, investors focused their anger on the bonuses proposed for Mr Pollaers. The first item relating to his share bonus recorded a 41.8 per cent "against" vote, with 56.6 per cent in favour. For the second motion, the vote was 42 per cent "against" and 56.4 per cent in favour.If SABMiller's takeover of Foster's succeeds, as is widely expected, 100 per cent of Mr Pollaers's performance rights for the 2011 incentive plan will vest, giving him 480,044 shares. If the company is taken over, only 50 per cent of a second tranche of stock, for the 2012 year and also consisting of 480,044 rights, will go to Mr Pollaers.Mr Crawford said such measures were needed to ensure the chief executive stayed with the company.He said Mr Pollaers had not been awarded any shares when he became chief executive. Mr Crawford told reporters after the meeting he was focused on the 88 per cent support for the remuneration report, which he described as "incredibly significant" in the current environment, in which many companies were facing strong "no" votes on this contentious item."I think the key vote is the remuneration report," he said. "It's the remuneration report that has been the substance of comment, criticism, review, reflection by investors etc, so the remuneration report is what everyone should be focusing on."Earlier, Mr Pollaers told shareholders there had been some improvement in beer sales in recent months.He said Foster's next week would launch Victoria Pale Lager, a crisp full-strength beer. It would also launch a campaign marketing Crown Lager .