Toll, Valad shareholders blast directors over executive payBy...

Toll, Valad shareholders blast directors over executive pay

By Geoff Easdown

Herald Sun

October 31, 2008 12:00am

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INVESTOR anger at huge executive pay deals boiled over yesterday as shareholders protested at performance-based incentives.

Directors at Toll Holdings (tol.ASX:Quote,News) and Valad Property Group were sharply rebuked over remuneration reports at their annual meetings.

Shareholder frustration at Toll was triggered by a $55 million cash payout of options held by company executives.

Toll chief executive Paul Little received $8.57 million for his options ahead of the share market slump which has seen Toll stock dive. Investor activism about pay deals has accelerated sharply this annual meeting season with strong opposition against arrangements which may have passed with little comment in better times.

At Valad's annual meeting 76 per cent of shareholders voted down the remuneration report.

Investors objected that Valad continues to pay generous bonuses, salaries and termination payments to management despite its shares falling 93 per cent this year.
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Chairman Stephen Day was awarded a 58 per cent rise in fixed pay to $926,000, plus $1.1 million in options and a $743,000 bonus despite the company's $248 million loss.

Materials giant Boral and drug developer Biota are among others to have felt investor wrath recently.

At yesterday's Toll meeting one shareholder told chairman Ray Horsburgh: "Our super funds are suffering - it's now time for all executives to take a hair cut."

The meeting heard the payment to Mr Little came from $55 million that directors spent to cash-out options held by 380 managers when Mark Rowsthorn's ports and rail business Asciano split from Toll in 2006.

In what became a fierce stand-off, directors were accused of "showering" the executives with cash and calculating the payouts on "casino-like assumptions".

The meeting heard that shareholder advisory group RiskMetrics had shown the payout was based on an assumption of 24 per cent earnings per share growth for three years and Toll shares between $30 and $40.

Yesterday Toll shares closed 16 up at $5.95, compared with the $16 one shareholder said he had paid.

Forty five per cent of shareholders voted against the remuneration report. It survived only because Mr Little voted his shares in favour of the deal which took his total salary package to $5.34 million, including $1.87 million in options.