10 popular ASX stocks that faced shareholder revolts this AGM season

Investors vented their fury and frustration over high CEO salaries amid some mostly uninspiring share price performances this year.

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Investors in these 10 ASX stocks have given a powerful signal to the boards that they sure ain't happy!

In all cases, the shareholders lodged protest votes against the FY23 remuneration reports for CEOs, directors and key executives. That means more than 25% of the vote did not endorse the level of pay.

Also called first strike or second strike votes, this does not force a company to do anything, nor does it change what the managers are paid. The vote plays a mere advisory role.

However, boards do take protest votes seriously and, by law, they have to issue a formal response.

How does a first strike work?

The first strike is recorded, and then at the following year's AGM, a vote on the next remuneration report occurs. If there's a second strike, a spill motion is conducted. That allows shareholders to vote on whether to spill the board, which forces the directors (except the managing director) to stand for re-election.

The two strikes rule was introduced into law in 2011 to strengthen the accountability and transparency of executive remuneration and give investors more power over the salaries of company bigwigs.

When a first strike is recorded, the following year's remuneration report has to include an explanation of the board's proposed action in response to the protest vote or the reasons why no action was taken.

If a second strike occurs and the subsequent spill motion passes, a spill meeting has to take place within 90 days. This opens the door for shareholders to nominate new candidates for election.

What's the average salary of an ASX CEO?

Every year for the past 22 years, the Australian Council of Superannuation Investors (ACSI) has produced a handy report documenting the realised pay of ASX 200 CEOs.

The latest report, released in July this year and covering FY22, found the average CEO pay for ASX 100 companies was $5,266,905. The highest pay was $44 million, and the lowest was just over $610,000.

These amounts take into account whether (and when) the shares received on vesting were sold or retained.

Here are 10 ASX stocks that received protest votes this year. We've included the total CEO pay packages for each company, which combine the base salary, performance rights, bonuses, and other incentives.

Qantas Airways Limited (ASX: QAN)

A whopping 83% of shareholders voted against the remuneration report at this year's AGM.

Qantas paid former CEO Alan Joyce AC, who retired in September, a staggering $21.4 million in FY23.

There has been public outcry over Joyce's pay and various other major issues this year.

These include the illegal sacking of staff, customers' difficulty with COVID travel credits, and an ACCC law suit in which the consumer watchdog alleges Qantas sold tickets for 8,000 flights it knew were cancelled.

The ASX 200 travel stock has fallen by more than 7% in the year to date.

Harvey Norman Holdings Limited (ASX: HVN)

Harvey Norman shareholders were about as furious as Qantas investors this year, if the protest vote is anything to go by. Similarly, a near-82% of votes were against the remuneration report.

CEO and executive director Katie Page received $3.82 million in FY23.

The Harvey Norman share price has eased by more than 5% in the year to date.

On the day of the AGM, the iconic retailer revealed a 7.8% decline in sales revenue for the period 1 July 2023 to 25 November compared to the same period last year.

This contrasted with online-only retailer Temple & Webster Group Ltd (ASX: TPW), which reported a 23% boost in sales revenue for the period 1 July to 27 November on the same day.

Magellan Financial Group Ltd (ASX: MFG)

Just over 58% of shareholders voted against the remuneration report at the AGM.

The pay for executive director David George was about $3.43 million in FY23.

The Magellan share price has fallen by just over 4% in the year to date. The struggling ASX financial stock has had a dramatic fall from grace in recent years, as shown below.

Fortescue Ltd (ASX: FMG)

Just over 52% of shareholders voted against the remuneration report at this year's AGM.

The ASX 200 iron ore stock was previously helmed by Elizabeth Gaines. Fortescue paid its former CEO a total of $5.57 million in FY23.

The Fortescue share price has risen by more than 25% in the year to date.

Lake Resources N.L. (ASX: LKE

The ASX lithium explorer copped a second strike vote at this year's AGM.

About 50% of shareholders lodged a protest vote against the remuneration report.

The ASX stock's managing director and CEO, David Dickson, received a pay packet worth $3.36 million.

As this vote was a second strike, the company had to conduct a spill motion. However, about 70% of shareholders voted against changing the board.

In the report, the company addressed the 34.82% first strike vote recorded at the FY22 AGM.

Lake Resources said it has "taken steps to address and mitigate shareholder concerns regarding the Remuneration Framework …".

This includes reworking the CEO's pay structure to create stronger links between incentives and performance while also ensuring it is "appropriate and reasonable" compared to industry peers.

The Lake Resources share price has fallen by more than 80% in 2023.

Sayona Mining Ltd (ASX: SYA)

Just over 48% of shareholders voted against the remuneration report at this year's AGM.

Former CEO Brett Lynch received a handsome pay package worth $2.7 million in FY23.

The Sayona Mining share price has fallen by more than 70% in the year to date.

Whitehaven Coal Ltd (ASX: WHC)

Just over 40% of shareholders voted against the remuneration report at the coal miner's AGM.

Whitehaven's managing director Paul Flynn received $6.03 million in FY23.

The Whitehaven share price has lost 18% of its value in the year to date.

Bank of Queensland Ltd (ASX: BOQ)

Just over 40% of shareholders lodged a protest vote amid managing director and CEO Patrick Allaway warning them that lower returns are likely in 2024 due to the cost of fixing several issues.

Allaway received just under $1.24 million in FY23, according to the remuneration report.

The ASX 200 bank stock has fallen by more than 17% in the year to date.

Woolworths Group Ltd (ASX: WOW)

About 28% of shareholders voted against the remuneration report.

Managing director and CEO Brad Banducci received $8.64 million in pay and entitlements.

The Woolworths share price has increased by 8% in 2023.

Core Lithium Ltd (ASX: CXO)

There was a fairly weak protest vote at the AGM for this ASX 200 lithium stock.

A total of 25.4% of votes were cast against the remuneration report.

The pay for CEO Gareth Manderson was just under $1.19 million.

The Core Lithium share price has fallen by more than 75% in the year to date.

Motley Fool contributor Bronwyn Allen has positions in Core Lithium, Harvey Norman, and Magellan Financial Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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