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Investors vent fury at takeover and Pollaers' pay

FOSTER'S shareholders showed no jubilation about the company's $12 billion takeover by global brewer SABMiller yesterday, choosing instead to flay directors for selling out while almost scuttling $5.2 million in performance rights for the new chief executive, John Pollaers.

FOSTER'S shareholders showed no jubilation about the company's $12 billion takeover by global brewer SABMiller yesterday, choosing instead to flay directors for selling out while almost scuttling $5.2 million in performance rights for the new chief executive, John Pollaers.

In what will most likely be the final annual meeting for the Australian beer group, vocal and sometimes emotional shareholders cheered and heckled from their seats as the chairman, David Crawford, tried to explain the reasons for accepting SABMiller's bid.

One investor was brought to tears about the public demise of Foster's and others attacked the thinking of larger shareholders such as superannuation funds for supporting the bid to make a quick return.

At times calling the board disgraceful for their decision to sell the company and yelling abuse from back of the hall, investors exacted revenge on directors by almost voting down two motions that sought to award long-term incentive stock to Mr Pollaers.

Many questioned if directors had the confidence to run Foster's as an independent company, and argued the bid from SABMiller in September, priced at $5.5325 a share, greatly undervalued the long-term value of the group and its beer assets. The bid has the full support of the board. Shareholders vote on the deal later this year.

Feeding into the general mood of revolt among Australian shareholders against pay and bonuses for executives in public companies this reporting season, investors channelled their collective anger into 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. The second motion went just as badly, with displeased shareholders voting 42 per cent "against" and 56.4 per cent in favour.

If SABMiller's takeover of Foster's is successful, as is expected, 100 per cent of Mr Pollaer's performance rights for the 2011 incentive plan will vest, giving him 480,044 shares.

Only 50 per cent of the second tranche of stock for the 2012 year, also consisting of 480,044 rights, will go to Mr Pollaers if the company is taken over with the remaining performance shares extinguished.

Mr Crawford said such performance rights were required in times of ownership uncertainty to ensure the chief executive remained with the company. Mr Crawford also said Mr Pollaers was not awarded shares when he became chief executive.

After the meeting, Mr Crawford told reporters he was more focused on the 88 per cent support garnered from shareholders for the remuneration report, which he described as "incredibly significant" in the current environment where many companies were facing strong "no" votes on the contentious AGM item.

"I think the key vote is the remuneration report 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 and that is what I believe is the most important."


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