Shareholders in Alumina have lost patience with the company's poor performance, delivering a first-strike vote against its executive pay plan.
Chief executive John Bevan's $2.2 million plus salary package, which included a cash bonus, was the focus of the angst, after the company posted an annual net loss of $US62.1 million in 2012.
Alumina is among the sharemarket's top 100 but does not actually operate the bauxite, alumina and aluminium assets in which it holds a 40 per cent stake with partner Alcoa.
The setback for Alumina's board follows news this week that aluminium giant Alcoa was considering deep production cuts worldwide, as it struggles with plunging global aluminium prices and a high dollar.
That news cast a shadow over the future of its Point Henry aluminium smelter in Geelong, which Alcoa considered closing last year before it received a $40 million bailout from federal and state governments.
About 50 per cent of Alumina's shareholders voted against the company's remuneration report at its annual meeting in Melbourne on Friday. Under the so-called "two strikes" rule, shareholders can spill the board next year if more than 25 per cent vote against the remuneration report again.
Australian Shareholders Association member Graeme Hawkins pointed out that while Mr Bevan was receiving a bonus worth more than half of his salary, ordinary shareholders had received no dividends and the share price had fallen.
"Someone suggested to me that it's only a post office company that just collects the dividend," Mr Hawkins said, repeating a line shareholder activist Stephen Mayne has used to describe Alumina.
"That would be unfair, but it is unfair to all the shareholders here that they are not getting anything and he is getting such a huge short-term incentive."
Chairman John Pizzey - who receives a $376,000-plus package - rejected the description.
Mr Bevan had done a good job renegotiating the company's debt last year, he said, which was net $US664 million. The company and the industry generally had been hurt by weak prices related to over-supply.
Trading conditions remained "challenging", he told the meeting.
But Mr Bevan said he saw light at the end of the tunnel. "I think we're actually very well placed, the industry is at an inflection point and the ability to supply bauxite will determine who are the winners in the industry," he said.
"China dominates the market but is not self-sufficient and relies on imports of bauxite and alumina . . . to make aluminium."
Alumina has a new 13 per cent major shareholder in China's state-owned CITIC, which diluted the holdings of other investors.
However, Mr Bevan said the new investor would be a major benefit in dealing with China.