Westfield owner hit with AGM protest over executive pay
Scentre Group, the owner and manager of Westfield malls, has suffered a resounding swing against its remuneration report at the group’s annual meeting and chief executive Peter Allen has had $11 million wiped off his pay due to the impact on the business from the global pandemic.
Proxy advisers Institutional Shareholder Services (ISS) and CGI Glass Lewis were among those who voted 51 per cent against the remuneration report. It is the first strike for Scentre since its listing in 2014. If the company incurs a 25 per cent vote against the remuneration report at its next annual meeting then the entire board faces a spill motion.
“We are disappointed [by the vote] given the time and focus the board devoted to these important issues on your behalf and the consideration we have given to the outcomes the group and management delivered in the most uncertain and complex operating environment,” Scentre chairman Brian Schwartz said at the virtual meeting on Thursday.
Even before the impact of the global pandemic, there has been an escalation in shareholders flexing their muscles over remuneration.
Mr Schwartz said there were no pay increases for management in 2020 and Mr Allen had not an increase since taking on the role in 2014. “There has been a very substantial reduction in earnings for our team. The fixed remuneration for senior management and base board fees were reduced by 20 per cent at the height of the pandemic and remained at that reduced level for three months,” he said.
He added that due to COVID and the impact on Scentre’s tenants, Mr Allen had effectively lost $11 million in a range of incentives in his overall pay packet. “By the end of the year, they were worth zero, and they were worth over $11 million at the start of 2020,” Mr Schwartz said.
Shopping centres bore the brunt of the pandemic with all but food-related tenants being forced to close for an extended period of time. However, thanks to demand for food and groceries, Scentre kept is 42 malls in Australia and New Zealand open in 2020.
Scentre did not receive any financial support from the Australian or New Zealand governments, including from the JobKeeper program.
In his address Mr Allen said cash flow momentum had continued into 2021 with gross rental cash inflow for the three months to March 31 in excess of $600 million.
“Operating profit and funds from operations for 2020 were $765 million or 14.7¢ per security. This included a credit charge of $304 million relating to the financial impact of the pandemic,” Mr Allen said.
“Whilst COVID-19 uncertainty remains in 2021, subject to no material change in conditions, the group expects to distribute at least 14¢ per security for 2021.”
