Paladin moves to pacify shareholders

Paladin Energy has cut the termination payment its chief executive John Borshoff will receive if he is ousted from the company as the uranium miner continues its efforts to pacify groups of angry shareholders.

Several shareholder groups are pushing for change at the top of Paladin before next week's annual meeting, and have Mr Borshoff and chairman Rick Crabb in their sights.

Mr Borshoff has twice cut his remuneration package in recent years, and documents suggest the company has further reduced his severance pay entitlements.

Previously, Mr Borshoff was entitled to a severance package of two times his base salary, calculated using the base salary he had earned in his last two years in the job. . But Paladin's notes to shareholders before the AGM revealed those entitlements had been halved.

"Payment of a benefit on retirement or early termination by the company, other than for gross misconduct, equal to one year's average base salary for the two years immediately preceding the termination date," the company's notes said.

Paladin, which has been run by Mr Borshoff, with Mr Crabb as chairman, for almost 20 years, appears to be preparing for a new leadership era, irrespective of whether the change is gradual, over several years, or quicker and more brutal.

Aside from the rebel shareholders seeking to oust the pair, Mr Crabb told BusinessDay last week, "succession planning" was under way at the company, although he stressed that now was not the right time to make changes.

When asked about the changes to Mr Borshoff's termination entitlements, Mr Crabb said the decision, made some time ago, was in line with cost-cutting efforts throughout the company.

"During the course of the last 12 months it was agreed that the retirement benefit would be limited to one year's average salary, which is sort of the general practice nowadays," he said.

"It really reflects John's goodwill and desire to support the company."

Two proxy advisers, CGI Glass Lewis and Ownership Matters, have recommended shareholders vote in favour of all motions at the annual meeting, including the re-election of Mr Crabb. The two advisers both urged shareholders to also ratify a dilutive share placement that was made in August.

Mr Crabb said he was disappointed that some other proxy advisers had urged shareholders to vote against some measures, and he questioned the accuracy of their work.

He said shareholders should take into account the improved operational performance at the company's two mines in Africa during the past 18 months, and the extensive cost cutting undertaken in recent times.

"Apart from the effect of the low uranium price we wouldn't be a news item ... we can't do anything about the uranium price but we are doing whatever else we can," he said.

In a mostly positive report, CGI noted that the fixed elements of Mr Borshoff's remuneration were high, and "ensure a high level of reward regardless of performance".

Several Paladin shareholders have told Businessday of their intentions to vote against Mr Crabb's re-election and to also oppose a ratification of the dilutive share placement.