Important highlights from upcoming meetings, provided by Glass Lewis’ global research team:

The Star Entertainment Group Limited
Australian Securities Exchange October 22

There’s no doubt that that companies in the tourism and hospitality sectors were some of the most impacted by the COVID-19 pandemic. The Star Entertainment Group Limited (SGR) was no exception, as the pandemic had a significant impact on the gambling and entertainment company’s Q4 FY2020 performance due to Federal and State Government directives requiring the closure of all non-essential businesses.

As result of the closures, the SGR’s full year normalised NPAT of A$120.8 million was 46.0% below the prior year and 49.0% below target. In addition, approximately 90% of SGR’s employees were temporarily stood down in March 2020 when operations ceased. Shareholders also experienced a significant fall in share price of 31% as at June 30, 2020 compared to the prior year, and the payment of the interim dividend was deferred, and no final dividend was declared.

In terms of remuneration outcomes, the financial gateway condition under the 2020 short-term incentive (STI) plan was not passed, therefore no bonuses were payable to management (unless the board exercises its discretion). In addition, NEDs and executives accepted pay reductions of between 20% to 50% for the fourth quarter of the financial year.

Having considered a range of factors, including the SGR’s performance pre COVID-19, the impact of the pandemic on stakeholders, management’s response and the delivery of “significant milestones” over the period, the board exercised its discretion to allow for 40% of ‘on-target’ STI opportunity for key executives (60% for other STI plan participants) to be delivered in 100% equity, subject to a one-year retention restriction from the date of the award, to “enhance the alignment with shareholder outcomes”. The board, therefore, is seeking shareholder approval at its 2020 AGM to grant restricted shares to the value of A$829,872 to MD/CEO Matt Bekier (61% of his fixed remuneration for FY2020).

In its most recent annual report, the board outlines in detail how it had arrived in its use of discretion. Shareholders, however, will have to decide whether the payouts to top management are reasonable or too generous, considering what SGR’s shareholders and the vast majority of its workforce had experienced due to the pandemic.

Cleanaway Waste Management Limited
Australian Securities Exchange October 14

Cleanaway’s CEO, Vik Bansal, has been in the spotlight this year due to claims made about his workplace behaviour. After the board was advised of claims made about workplace behaviours involving the CEO, a thorough independent investigation was conducted. However, Cleanaway has been vague in disclosing the details of the investigation and how it trickled into the CEO’s remuneration for the year under review and going forward. The contradictory statement from Cleanaway makes it unclear to the extent the board has sought to use remuneration to enforce and protect company culture.

Cleanaway was provided with the findings of the investigation and received a written report in respect of the investigation prior to the release of its Annual Results. However, there was no mention of the investigation in its Annual Results. While the Remuneration Report initially stated that the 25% reduction in CEO’s STI was due to COVID-19 related challenges, the company later changed or add to the story saying that the STI reduction was partially due to CEO’s conduct. Cleanaway also withdrew CEO’s equity grant proposals from the 2020 AGM (valued at approximately A$2.334 million) stating that the CEO volunteered to forgo these rights.

The company has also received a query letter from the ASX in relation to the investigation and share disposal by the CEO. The CEO had disposed of 4 million shares for A$10 million.

The federal government’s workplace health and safety agency, Comcare, has also opened an investigation into the company following revelations of several probes into alleged bullying by the CEO. Shareholders should be concerned with any type of regulatory investigation involving the company, as such matters may dampen shareholder value. Cleanaway’s shares have fallen about 17% since the media revelations.