Lendlease avoids board spill and looks to the $114b pipeline for growth

Global property giant Lendlease has avoided a board spill at its annual general meeting with shareholders voting overwhelmingly to approve the revamped remuneration package for its senior executives.

Having received its first strike last year when more than 25 per cent of investors voted down the pay scheme, the group undertook a review of the policy after discussions with key proxy advisors and investors.

Under the strike system, if company incurs a second 25 per cent vote against the remuneration report at its annual meeting then the entire board faces a spill motion.

Speaking at the virtual annual general meeting, the chairman Michael Ullmer said after the first strike at the 2020 meeting the board updated its controversial remuneration policy.

“In response to investor feedback on our 2020 financial year Executive Reward Strategy (ERS), our planned review of remuneration arrangements was significantly expanded,” he said.

That resulted in the new chief executive Tony Lombardo, who replaced Steve McCann in June, taking a 33 per cent cut “unhurdled” remuneration, and 21 per cent cut for total maximum remuneration compared to Mr McCann.

Other key amendments include rebalancing the remuneration mix, with a higher proportion of remuneration subject to performance hurdles. The overall vote was 96.6 per cent for the adoption of the remuneration report.

The Australian Shareholders Association (ASA) approved the revised remuneration policy saying the first strike against the remuneration report resulted in substantial changes “for the better”, in particular the removal of the no hurdle retention payment.

“However, in future we will probably vote against if it doesn’t correct the short-term approach. In particular the long-term awards are only measured over three years, which is much too short for a company whose main non-investment business is 10 years or longer projects,” the ASA said.