QBE has been hit by an institutional investor backlash over a multimillion-dollar payout to former chief executive Frank O'Halloran, as the insurer vowed to lift its performance after a disappointing year.
Mr O'Halloran, who last year ended a 14-year stint at the company's helm, is set to receive a retirement payment worth $2.34 million, on top of his other entitlements, with the potential to make more if the company performs well over the next few years.
Although Mr O'Halloran is credited with turning QBE into a global force in insurance, a string of acquisitions made under his watch have also come back to bite the company in recent years.
In a sign of the widespread frustration among big investors, some 39 per cent of votes cast at Wednesday's annual meeting were against QBE's move to pay Mr O'Halloran the $2.34 million "retirement allowance".
A resolution to grant long-term performance rights to Mr O'Halloran received a 34 per cent "against" vote, despite the company this month toughening up certain performance hurdles for the package.
QBE chairman Belinda Hutchinson defended the retirement payment by saying the company was honouring a contract signed with Mr O'Halloran in the 1990s.
"The arrangement was part of his overall remuneration," Ms Hutchinson said. "It's important to be aware that these payments are no longer made to our senior executives."
Ms Hutchinson also said the performance rights that were approved on Wednesday would not be paid until 2016 or 2017, despite Mr O'Halloran retiring in August last year.
The company's remuneration report was backed by more than 90 per cent of shareholders - a sign investor frustration is targeted at the former chief executive.
The protest vote over the payments to Mr O'Halloran come after a disappointing year in which QBE's struggling US arm was battered by hefty claims arising from super-storm Sandy.
After-tax profit rose by a weaker than expected 8 per cent to $US761 million in the year to December, and the final dividend was cut to 10¢ a share, from 25¢ a year earlier.
Mr O'Halloran's replacement, John Neal, has sought to curb expenses and run existing businesses more efficiently after years of acquisition-fuelled growth, and is shedding staff in Australia and replacing them with workers in the Philippines.
Ms Hutchinson said she was disappointed with the result, but she said QBE was on track to hit its growth targets for 2013.
In a move that was attacked by retail shareholders at the meeting, the company last year slashed the share of profits it pays as dividends from 70 per cent to 50 per cent.
But Ms Hutchinson said the move was needed to satisfy regulators and credit rating agencies.
QBE share rose 48¢, or 3.7 per cent, to $13.42.