Bonuses will be paid to executives at loss-making legal giant Slater and Gordon despite a shareholder revolt at the Australian stock exchange-listed company's annual general meeting today.
Local press reports said that nearly 45% of shareholders voted against the company's remuneration report at a meeting marked by strong investor anger. Slater and Gordon's share price has collapsed over the past year in the fallout from its disastrous acquisition of the professional services arm of UK company Quindell.
During his address to shareholders, chairman John Skippen said he wanted to reiterate his apology for the financial losses they have suffered and admitted that ‘a lot more work needs to be done’ to build a sustainable business in the UK.
‘We are very disappointed that we had to make such a large write off relating to the Slater and Gordon Solutions acquisition and are very concerned by the under performance of our UK operations in general.’
In a trading update to the Australian Stock Exchange today, Skippen, outlined the scale of ongoing cuts to the firm’s UK operation and said more offices are due to close. A 16% reduction to headcount so far this year ‘has delivered immediate financial benefits’, Skippen said. Meanwhile the number of operating sites will have fallen from 47 to 32 by January 2017 ‘with further locations due to be reorganised or closed in the remainder of 2017’.
Group managing director Andrew Grech confirmed the reorganisation of the UK business is ‘largely complete’, with headcount reduced by 16% and operating sites reduced from 47 to 32 by January 2017, with further sites set to be closed during the remainder of 2017.
Grech added: ‘Delays to implementation have been experienced in some areas, however the reorganisation is past the period of maximum risk with limited disruption to our clients.
Grech is one beneficiary of a bonus package approved at the meeting despite the company's decision to pay no dividend this year. More than 32% of investors voted against the bonus. Board papers said that the overall value of Grech's remuneration package remains the same in 2017 as it was in 2016.
Cash bonuses to chief financial officer Bryce Houghton and chief operating officer Felicity Pantelidis also attracted investors' anger.
The Sydney Morning Herald quoted one shareholder as saying that the board had ’totally failed’ in its governance role. ’It has really failed to have any financial oversight in place. Not one board member has put their hand up and accepted accountability for this,” Marcel Coleman said. ’The reality is this board has no credibility,’ Coleman said, calling for all members of the board to stand for re-election.
Slater and Gordon Group share price fell by 2.78% to A$0.35 (£0.22) today.