Vote blow for iSelect chiefs
At its first annual meeting since it was floated in June, about 28 per cent of votes were cast against its remuneration report.
If a company receives two strikes - a vote of 25 per cent or more against its executive-pay report two years in a row - a vote on a board spill is triggered.
The Australian Shareholders Association urged a vote against the report because it believed its short-term bonuses were too generous, while its long-term incentives covered too short a period. The ASA also did not support iSelect's non-recourse loans, which it said protected "executives from downside risk at the expense of the company".
Almost 11 per cent of votes were also cast against the re-election of Leslie Webb as a director.
iSelect's shares have never traded above their issue price of $1.85. On Monday they closed at $1.20.
Founder and executive chairman Damien Waller told shareholders: "The important thing to bear in mind is that our performance on the stock exchange isn't the result of something fundamentally wrong with the business."
Frequently Asked Questions about this Article…
A first strike against iSelect's remuneration report means that a significant portion of shareholders, about 28%, voted against it. If the company receives a second strike next year, it could trigger a vote on a board spill, which could lead to changes in the company's board of directors.
The Australian Shareholders Association (ASA) urged a vote against iSelect's remuneration report because they believed the short-term bonuses were too generous and the long-term incentives covered too short a period. Additionally, they were concerned about non-recourse loans that protected executives from downside risk at the company's expense.
Non-recourse loans are loans where the borrower is not personally liable beyond the collateral. In iSelect's case, the ASA criticized these loans because they protect executives from downside risk, potentially at the expense of the company and its shareholders.
Since its floatation, iSelect's shares have never traded above their issue price of $1.85. As of the latest update, the shares closed at $1.20, indicating a decline in value.
Almost 11% of votes were cast against the re-election of Leslie Webb as a director, indicating some shareholder dissatisfaction with his performance or role on the board.
Damien Waller, iSelect's executive chairman, reassured shareholders by stating that the company's stock performance is not due to any fundamental issues with the business itself.
If iSelect receives a second strike, it could lead to a vote on a board spill. This means shareholders would have the opportunity to vote on whether to remove the current board members, potentially leading to significant changes in the company's leadership.
Remuneration reports and shareholder votes are important because they reflect how a company compensates its executives and how shareholders feel about those compensation practices. These factors can influence a company's governance, performance, and ultimately, its stock value.
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