Paladin trims CEO's retirement payout
Paladin Energy has cut the termination payment that chief executive John Borshoff will receive if he is ousted from the company, as the uranium miner tries to pacify a group of angry shareholders.
Multiple shareholder groups are pushing for change at the top of Paladin before next week's annual meeting, with Mr Borshoff and chairman Rick Crabb particularly in their sights.
Mr Borshoff has twice cut his remuneration package in recent years and documents suggest the company has further reduced his entitlements to severance pay.
Previously, Mr Borshoff was entitled to a severance package of two times his base salary, calculated using the base salary he had earned in the two years before being sacked or removed. But in notes to shareholders before the annual meeting, Paladin revealed those entitlements have been halved.
"Payment of a benefit on retirement or early termination by the company other than for gross misconduct [will be] equal to one year's average base salary for the two years immediately preceding the termination date," it said.
Paladin has been run by Mr Borshoff and chaired by Mr Crabb for almost 20 years, and the company appears to be preparing for a new leadership era, irrespective of whether that change happens gradually over several years or in a quicker, more brutal way. Aside from the rebel shareholders that are seeking to oust the pair, Mr Crabb told BusinessDay last week "succession planning" was under way, although he stressed now was not the time for change.
Mr Crabb said the remuneration decision was taken some time ago and was in line with cost-cutting across 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 AGM, including the re-election of Mr Crabb.
The advisers urged shareholders to ratify a dilutive share placement made in August.
Mr Crabb said he was disappointed that some other proxy advisers had urged shareholders to vote against some measures, and 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 over the past 18 months, and the extensive cost-cutting that had been 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 ... price but we are doing whatever else we can," he said.
In a mostly positive report, CGI noted 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 intention to vote against Mr Crabb's re-election and oppose a ratification of the dilutive share placement.