Orora Ltd (ASX: ORA) shareholders have vented their frustration with management, lodging a massive vote against the company's remuneration report amid concerns about the company's strategy.
At the company's annual general meeting held on Wednesday, 48.38% of the votes cast were against the adoption of the remuneration report.
Under Australian Corporate law, a vote of 25% or more against is considered a first strike.
If a company racks up two strikes in a row, a vote must then be held on whether to either spill the board or retain the company's directors.
There was also a sizeable protest vote against the incentive package for the company's managing director, Brian Lowe, with 11.46% of votes cast going against that resolution.
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Trading not up to scratch
Orora chair Rob Sindel acknowledged the large protest vote against the remuneration report, and also that the company's Saverglass division was performing below expectations.
Orora took over Saverglass in late 2023, in a $2.16 billion deal funded with $1.35 billion in new debt and equity.
The company bought the French company from private equity firm Carlyle, with Saverglass focused on high-end wine and spirits bottles for the global market.
Mr Sindel said the past financial year had been a period of "transformation" for Orora, as it integrated Saverglass into the company and reorganised the company into three regions.
During the period, Orora also sold its packaging solutions and closures business.
These strategic changes were major milestones in our history, completing the realignment of our portfolio that began with the sale of the Fibre business in 2020 and the transformational acquisition of Saverglass in 2023. Having said that, the performance of Saverglass has not met expectations in our first 18 months of ownership. Demand was softer than forecast, however we are confident the changes we are making both here, in Australia and globally will ensure the future success of our glass business.
Outlook looking up
Mr Sindel said the company was now well-placed with strong market positions in the Australasian cans market and the global premium glass market, and with no new acquisitions expected in the near to medium term, "we remain committed to disciplined capital management''.
This, combined with our strong balance sheet, positions us well for ongoing shareholder returns, through dividends and our on-market buyback program.
Mr Sindel acknowledged shareholder concerns with the remuneration report but defended the company's remuneration settings, stating that the sale of one of the company's North American businesses during the year was "highly successful" and warranted a reward for executives.
As a board we are confident that the changes made to remuneration ensured that incentive plans remain relevant, fair, and aligned with the ongoing business, so that executives are neither unfairly advantaged nor disadvantaged through structural changes.
Orora shares closed steady at $2.02 on Wednesday.
