Cash Converters hit with "peculiar" strike
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PERTH, Nov 16 AAP
November 16 2012, 5:47PM
The head of Cash Converters says a "first strike" delivered against the company's pay report on Friday is peculiar, given that shareholders approved executive share bonuses two years ago.
More than 31 per cent of shareholder votes were cast against Cash Converters' remuneration report at the company's Annual General Meeting (AGM) in Perth on Friday.
The move paves the way for a board spill of the second-hand goods dealer and loan provider, if at least the same percentage of shareholders again vote against the report next year.
Managing director Peter Cumins said he was surprised by the backlash because shareholders had voted in favour of the company's long-term incentive plan at the company's AGM in 2010.
In fiscal 2012 Mr Cumins received a total pay package of $2.1 million, including $1.2 million in shares.
"If somebody had come to us and said we're against this, we could at least have explained it," Mr Cumins told AAP.
"But it was really peculiar that this was approved by shareholders."
He believes two nominee companies voted against the pay report after receiving advice.
"Companies which do research and make recommendations to these nominee companies really don't think it through," he said.
"It's all based on mathematical metrics."
Cash Converters' annual report said the bonus paid to Mr Cumins was for achieving a better than forecast profit result.
Still, no shareholders contacted the company with concerns prior to the vote.
A total of 98 per cent of shareholders voted to re-elect director John Yeudall on Friday, a move Mr Cumins attributes to satisfaction with the current board.
However, he said Australia was starting to see some unintended consequences of new laws on executive pay, following reports that shareholders were using the "strike" device as a general protest against boards or individual directors.
On September 30, National Nominees Ltd and HSBC Nominees Ltd each held a seven per cent interest in Cash Converters, while Ezcorp Inc held a 32 per cent stake in the company, according to Iress data.
Cash Converters added that it expects to increase its short-term lending this financial year as smaller providers leave the industry due to regulatory changes.
New laws aimed at tightening responsible lending obligations for short-term loan providers will take effect from March next year.
The laws were positive for Cash Converters as a significant proportion of the company's earnings were generated from the provision of short term credit.
The Perth-based company also said it was looking at acquiring a number of new stores in Australia and it expects continued growth in its Australian and UK loan books over the coming financial year.
The Australian personal loan book reached $72.1 million on November 13, up from $67.6 million on June 30.
By Kim Christian