The concept of shareholder return being linked to KPIs is...

The concept of shareholder return being linked to KPIs is bonkers. Share price is the one thing that executives can't control.

Executives should be rewarded for things that are under their control. Further growth industries (eg tech) are likely to have shares that outperform the market whereas a mature business (or even declining over the longer term - thermal coal anyone, hence the acquisition of met coal mines) will underperform the market.... In Australia, the ASX 200 is very overweigh, compared to global markets, in iron ore (rio bhp fmg) and financials (big 4 banks). Why would a coal company bench mark its executive bonuses against a market that is completely irrelevant to its operational performance?

The invasion of the Ukraine that drove up the price of coal and the share price of coal producers does that mean that executives should be paid a bonus for our performance of their share price because a war drove the price of the commodity higher and therefore profit.... Ignoring sanctions it makes more sense to send Putin the bonus as he caused the spike in the share price.

Further, where share price is a driver of a remuneration, MDs have an incentive to spend more time promoting the company to drive up the share price that may be detrimental to the company in the future as operational matters are not tended to or not commit to capex expenditure that is good for the long term of the business (think of QANTAS' aging fleet of aeroplanes).

I suspect that Bell Rock Capital has an investment thesis that maximizes their portfolio returns and that thesis involves thermal coal producers returning all cash to shareholders and not reinvesting in expansion of the thermal operations and the acquisition of other longer term assets (met coal). If my suspicions are anywhere near correct (I will let others form their own view) the Bell Rock capital is agitating to have other shareholders vote against the remuneration report and incentive plan in an attempt to pressure the board to undertake a course of action that is in the best interests of Bell Rock Capital and not necessarily in the interests of WHC the company. It follows that the directors of WHC, who have a fiduciary duty to act in the best interest of the company and not a single shareholders, have decided that the best interests of WHC is to shift to met coal.

Another example that I believe illustrates BRC motives is the comment "Whitehaven Coal has drastically underperformed on the ASX over the last twelve months and should not be rewarded". While the first part of the sentence is correct, it conveniently omits the fact that since mid 2020 the share price has basically gone up 7 fold and dividends of $1.2 have been paid. And the company is moving from a thermal coal producer to a met coal producer. I would argue that contrary to Bell Rock Capital the management and directors should not only be rewarded but given a medal!

Finally, BRC rely on an ISS report. These reports are primarily written for institutional investors to provide them with a guide as to how to vote. From the proxy adviser reports I have seen over time they are often standard form, contain factual errors (which are not rectified when the company point them out) and have a tendency to "revert to the mean" (ie everyone else is doing x and you are not so you must be wrong!). On this basis, if ISS had provided a recommendation on how to vote at the recent referendum it would have recommended a "yes" vote as pretty much everyone in corporate Australia was supporting "yes" - which was not the winning and therefore the correct assessment. So I would take any reliance on the ISS report with a "grain of salt". Note: a quick internet search has not revealed the ISS report referred to so I am unable to fully comment on it. If anyone has a copy please post so that we can assess the quality of the report.

While not a shareholder*, I note that if I was, I would not be voting against the remuneration report or the incentive package as a vote against would be for the interests of BRC which are not necessarily in the interests of the company and the long-term retail shareholder.

* I do not like thermal coal from an ESG perspective and have not invested in coal companies that have significant (circa 50%) thermal coal sales.

Best

BSP

NFA, DYOR, GLTAH