Vote on $1.8m pay for Sonic’s Goldschmidt
Executive pay votes for listed companies have historically been non-binding, but from this year the new “two strikes” rule means if more than a quarter of shareholders vote against a pay resolution, the company must justify the proposal and put the matter to shareholders again. If they vote ‘no’ a second time, the company must call another meeting to decide the future of its directors.
Already some of Australia’s biggest companies – including Foster’s, Pacific Brands and others – have had shareholders delivering their first legally binding “strike” against pay rises.
Australian Shareholders Association CEO Vas Kolesnikoff told MO there was no indication a shareholder revolt loomed for Sonic, but if 25% disapproved of upping Dr Goldschmidt’s base pay to $1.8 million a year for the next five years – from $1.5 million for the past five – the company would have to explain itself.