Lend Lease incurs first strike on pay
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PERTH, Nov 15 AAP
November 15 2012, 4:06PM
Lend Lease Group has incurred its "first strike," with 26 per cent of shareholders voting against the property developer's executive pay report.
The move paves the way for a board spill next year, if at least the same percentage of shareholders again vote against the report.
This year's so called first strike follows accounting discrepancies within its Abigroup business.
A total of 25.8 per cent of shareholder votes were cast against the remuneration report and almost 16 per cent of shareholders voted against the re-election of director Phillip Colebatch at the company's annual general meeting on Thursday.
Lend Lease also said on Thursday that it expected a challenging 2013 as sales remain sluggish, despite lower interest rates encouraging more people to start house hunting.
Chairman David Crawford said the operating environment was expected to remain difficult over the coming year but that the company continued to win new projects that would underpin future earnings growth.
"The group's financial strength and access to third-party capital means we have the financial flexibility to fund our development pipeline and invest in new opportunities that are in line with our strategy," Mr Crawford told the meeting.
"We are well on the way to delivering our target 15 per cent return on equity over the medium-term," he also said.
The outlook for Lend Lease's fiscal 2013 remained unchanged, despite discrepancies in profit reporting on two projects within the Abigroup construction business.
In response, the Lend Lease board imposed a 10 per cent cut to chief executive Steve McCann's short-term bonus scheme for fiscal 2012, which will be reported in fiscal 2013.
The 10 per cent pay cut will also be applied to members of Mr McCann's senior management team as the group implements "additional controls and process improvements" within Abigroup.
Mr Crawford said inquiry levels were increasing in response to lower interest rates and expects a rise in property settlements this financial year but at lower prices.
"The uncertain environment and the lack of impetus to buy in a market where valuations are not increasing means this is not yet translating into sales," he said.
Mr McCann said the group hoped to invest between $1 billion and $1.5 billion over the next three years in growth opportunities.
Lend Lease plans to start construction on its waterfront Barangaroo development in Sydney's CBD by the end of December.
At 1605 AEDT Lend Lease shares were two cents lower at $8.24.
By Kim Christian