Investor push for board spill at Paladin

A fresh round of executive pay cuts is unlikely to quell shareholder rumblings at Paladin Energy, where a campaign for change is gathering pace.

An Asian hedge fund is understood to be leading a campaign to unseat managing director John Borshoff, and possibly other long-serving directors of the uranium miner.

BusinessDay understands that some of Paladin's bigger shareholders, analysts and other market participants have been contacted by those leading the campaign, and told that owners of close to 30 per cent of Paladin shares would be supportive of a change should an extraordinary meeting of shareholders be called.

Discontent has been rumbling for several years, with Mr Borshoff being criticised for the size of his pay packet as far back as 2011.

He responded by cutting his base salary by 25 per cent, but he was soon back in shareholders' bad books when he sold $5.6 million worth of Paladin shares in November 2012.

Discontent flared again this year, when Mr Borshoff guided the market to expect a partial asset sale in the September quarter, only to stun investors with a highly-dilutive equity raising.

That raising saw the Paladin share price fall from $1 in August to just 48¢ earlier this week, meaning the stock has literally been decimated since the Fukushima nuclear disaster in March 2011.

Some investors are concerned that Mr Borshoff may be too optimistic about uranium prices and the value of Paladin's assets, and may be rebuffing offers from suitors that should be accepted.

Paladin sought to appease shareholders on Wednesday by announcing a set of cost reductions, which included further cuts to executive pay.

Directors will have their base salaries cut by 10 per cent, which in Mr Borshoff's case will see his $1.534 million base salary cut to about $1.38 million. That means his actual salary will now be more than $600,000 below his contracted base of $2.04 million.

The company has imposed a freeze on bonuses and pay rises until the uranium price recovers, slashed exploration spending and vowed to reduce operating costs at its two mines in Africa.

In total, Paladin aims to cut $23 million from costs in fiscal 2014, and the announcement pushed Paladin shares up by 5¢ to 53¢ on Wednesday.

PhillipCapital analyst Andrew Shearer welcomed the cuts, but said an asset sale was what the market was looking for.

"The challenge for Paladin remains generating sufficient revenue at current uranium prices to service their debt position," he said. "Completion of the partial sale of Langer Heinrich to reduce debt remains a market focus."