Ann: Notice of General Meeting/Proxy Form , page-10

Two strikes wake-up call

PUBLISHED: 09 Nov 2012 00:35:34 | UPDATED: 09 Nov 2012

Patrick Durkin reports the so-called “two strike” rule over executive pay is claimed to be being applied to reflect performance rather than remuneration (AGM strike rule in question, AFR November 3).

This is arguably splitting hairs, as in my view the main purpose of remuneration is to reward performance. Consider the situation of a small Adelaide listed company which is in line for strike two at its coming AGM.

It has directors who control a majority of the shares; who won’t engage in (offered) M&A discussions despite continued urging by minority shareholders; and who have presided over more than five years of indifferent earnings, an immobile share price and no dividends.

It is the view of the minority shareholders that the directors need to be given a wake-up call and the only way to make them listen is the two strikes method.