CEO's pay led to symbolic strike from shareholders
Xero chief executive officer Sukhinder Singh Cassidy has for the first time publicly addressed her controversial US$15.2 million pay package that led to a symbolic strike from investors in August.
Singh Cassidy told The Australian Financial Review (AFR) she was "very comfortable" that the board properly assessed her market value and considered concerns before finalising the deal.
"The board went through a very extensive process on my pay, it went on for six or seven months, and they talked to all of our major shareholders," the CEO told the AFR.
Singh Cassidy's pay package increased to US$15.2 million following a December 2024 board review, where her remuneration was assessed against similar US-based global tech CEOs once she had proven her performance.
But 48.74% of Xero's shareholders voted against it during the company's Annual General Meeting (AGM) last month, leading to a symbolic strike from the company's investors.
"I appreciate the AGM has just happened, but that consultative process lasted most of last year, and I felt very good about the process. I feel like I'm very aligned to shareholder interest, and I think like an owner," Singh Cassidy told the AFR.
ASX two-strike rule
In Australia, a vote of more than 25% opposing a company's pay practices constitutes a formal "strike" under the Australian Stock Exchange rules.
If 25% or more of shareholders vote against a company's remuneration report at two consecutive AGMs, it can trigger a vote to remove the board.
Xero, however, is legally registered and headquartered in New Zealand, where the two-strike rule does not apply.
The symbolic rejection of Xero's shareholders on Singh Cassidy's pay follows criticism that it was out of line with the Australian market.
Xero board chair David Thodey responded during the company's AGM that their approach to remuneration "is designed to attract the world-class talent needed to deliver" the company's global strategy.
It is also founded on strong principles that connect reward to performance, according to Thodey.
"While we are committed to listening and responding to this feedback, we are also committed to attracting, motivating, and retaining the global talent required to lead Xero's global strategy," he added.
Susan Peterson, Xero's People and Remuneration Committee Chair, also said during the AGM that their recent CEO remuneration review was guided by performance, scope and criticality of the role, and the location of the individual.
"I would like to assure all shareholders that the voting outcome of Resolution 5 (Adoption of Remuneration Report) and the comments that have been provided will be carefully considered by the Board when setting future remuneration strategy, and preparing next year's Remuneration Report," Peterson added.
