More than a quarter of shareholders voted against remuneration plans of 40 companies in 2024
A significant number of Australia's top companies faced backlash from investors over executive pay in 2024, with 40 companies seeing over a quarter of their shareholders vote against their remuneration proposals.
This marks the second consecutive year of near-record opposition, according to a report by shareholder advisory firm Georgeson, shared with Reuters.
The study revealed that the level of investor dissatisfaction was only slightly lower than the previous year's 41 companies. This figure represented a stark increase from the 2022 total.
In Australia, the remuneration vote, which became mandatory in 2011, allows shareholders to express their discontent. If more than 25% of shareholders vote "no," it counts as a strike.
A second consecutive strike gives investors the opportunity to vote on dismissing the entire board, though no such votes were successful in 2024.
While 2024 saw 12 companies facing a second strike compared to just two in 2023, the report found a trend of shrinking approval for executive pay across the board.
Among the companies hit by shareholder strikes in 2023 was Qantas, which had been embroiled in negative headlines surrounding industrial relations, cancelled flights, and the controversial actions of its former CEO.
Even companies that managed to pass their remuneration plans saw the size of approval votes shrink, with the average backing declining over the past five years.
Paul Murphy, head of ESG for Georgeson's Asia Pacific division, said the rising economic pressures are bringing executive pay into sharper focus.
"When you've got a kind of economic situation where there’s cost of living pressure, higher interest rates and so forth, the optics of very high executive pay are going to be more in the spotlight," Murphy told Reuters.
He added that these votes have become a broader way for investors to express dissatisfaction with company leadership.
"When the company's been under the spotlight because it's having sort of customer service issues or having some sort of conduct scandal, then what you tend to get is a very high protest," he explained.
The findings come in the wake of the widening wealth gap in Australia. New data from Oxfam revealed that the country's 47 billionaires earned an average of $67,000 per hour in 2024, or 1,000 times more than the median hourly wage of the average Australian worker.
