Brickworks misses 'strike' but to review bonus scheme
Poll results show that 24.3 per cent of votes cast opposed the report, just less than the 25 per cent needed.
Chairman Rob Millner told shareholders Brickworks would be reviewing aspects of its remuneration practices such as incentive schemes and associated performance hurdles, following criticism from some shareholders.
The size of the short-term incentive - $570,000 - paid to managing director Lindsay Partridge came in for criticism during its annual meeting on Tuesday due to the poor earnings of the company in recent years.
Mr Millner defended the large payout, pointing to the fact that net profit rose to $104.5 million from $30.4 million a year earlier.
Brickworks told shareholders the cross-holding with Soul Pattinson had helped sustain profits through the worst downturn in the building industry since World War II. Additionally, the rise in building activity will flow through to a fatter bottom line this financial year, barring the cost of the push by shareholders Perpetual and Carnegie and Co to unpick the Soul Pattinson cross shareholding, which has already topped $2 million.
The meeting was also told the company intends to appoint another independent director.
Frequently Asked Questions about this Article…
Brickworks narrowly avoided a 'first strike' vote against its remuneration report, which means that less than 25% of shareholders opposed the report. This is significant because a 'first strike' could lead to increased scrutiny and potential changes in the company's executive pay practices.
Brickworks is reviewing its incentive scheme and performance hurdles following criticism from some shareholders. The review aims to address concerns about the company's remuneration practices and ensure they align with shareholder expectations.
Brickworks faced criticism for the $570,000 short-term incentive paid to managing director Lindsay Partridge, especially given the company's poor earnings in recent years. Some shareholders questioned the appropriateness of such a large payout.
Chairman Rob Millner defended the large payout by highlighting that Brickworks' net profit rose significantly to $104.5 million from $30.4 million the previous year, suggesting that the payout was justified by the company's improved financial performance.
The cross-holding with Soul Pattinson has helped sustain Brickworks' profits during challenging times, such as the worst downturn in the building industry since World War II. This strategic relationship has been beneficial for the company's financial stability.
The rise in building activity is expected to positively impact Brickworks' financial performance, leading to a stronger bottom line in the current financial year, provided there are no significant costs from shareholder actions against the Soul Pattinson cross-holding.
Brickworks faces challenges from shareholders Perpetual and Carnegie and Co, who are pushing to unpick the Soul Pattinson cross-shareholding. This effort has already incurred costs exceeding $2 million, posing a financial challenge for the company.
Brickworks intends to appoint another independent director, which is part of its efforts to strengthen governance and potentially address shareholder concerns about the company's management and strategic direction.
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