QR NATIONAL has suffered a significant protest vote against its controversial executive-pay report but avoided a so-called "first strike".
Australia's largest rail company also received a backlash against the granting of equity to the chief executive, Lance Hockridge, at its annual meeting in Brisbane on Wednesday.
The final tally revealed that just over 17 per cent of votes were cast against the executive-pay report. Excluding the Queensland government's large stake in support, the no-vote amounted to about 23 per cent.
A so-called strike is recorded if 25 per cent or more of votes are made against the remuneration report. Two strikes in as many years would automatically trigger a spill of QR National's board.
Influential proxy adviser Ownership Matters and the Australian Shareholders' Association had urged a vote against the executive pay card because they believed QR National had used accounting changes to boost the bonuses for its senior executives.
The association's spokesman, Stephen Mayne, told the meeting it was a "complete outrage" the state government would vote in support of the board. "You deserved the ignominy of a strike," he told the board.
The state government, QR National's biggest shareholder, was not able to vote those shares that were due to be bought back by the company.
Ownership Matters had also urged a vote against the granting of performance rights to the CEO because it believed the hurdles he has to meet are too low. After the government again lent its support, the final tally against that resolution was 17 per cent.
Almost 8 per cent of votes were also cast against the re-election of Graeme John, who sits on the remuneration committee. Ownership Matters had recommended a vote against his return to the board.
Earlier, QR National's chairman, John Prescott, told shareholders the changes made to the executives' pay were not "merely accounting adjustments that give our executives a free kick".
"These are not simply end-of-year adjustments. Quite frankly, they're what we expect management to do to enhance shareholder value," he said.
The CEO received a total package of $4.56 million for the year to June.
QR National also said coal tonnages this financial year would be at the lower end of its guidance range of between 195 million and 205 million tonnes, compared with 186 million tonnes in 2011-12. Mr Hockridge said it would be difficult to give certainty on the amount of coal hauled due to "variable railings over the first four months and the wet season approaching".