Boardroom pay at listed Australian firm Slater and Gordon appears likely to rise sharply, following a six-month period in which the company’s value has fallen by more than half.
In an announcement to the Australian stock exchange ahead of the annual meeting on 20 November, the firm has given notice that it will seek shareholder approval to increase maximum annual payments for its four non-executive directors from around A$650,000 (£305,000) to A$950,000 (£446,000).
The notice explains that higher non-executive pay will give the company the ‘flexibility’ to increase the number of appointments to oversee ‘significantly expanded company operations’. The increase will also compensate directors for their ‘expanded responsibilities and time commitment’ since July.
The AGM comes after the end of a six-month period when the share price has dropped from A$6.54 to A$2.83.
Group managing director Andrew Grech and executive director Ken Fowlie, meanwhile, are in line for potentially lucrative share options under an employee equity plan. ‘Performance rights’ issued to Grech and Fowlie at no cost to them and valued at almost £300,000 in total will vest in 2018, subject to the company meeting certain performance targets.
In June, the company was notified that the Australian Securities and Investments Commission (ASIC) intended to raise some queries regarding the group’s accounting procedures.
In the 144-page annual report to shareholders, chair John Skippen explained errors in the reporting of historical UK cashflows have been ‘rectified’ and had no impact on net cash from operating activities.
Skippen said the company expects ASIC to complete its investigation shortly after what he described as an ‘extensive’ review.
The report reflects how much the company has had to spend on due diligence in a year when Slater and Gordon bought the professional services division of UK listed outfit Quindell.
In total in 2014/15, Slater and Gordon paid £774,000 for due diligence investigations compared with just £7,500 in 2013/14. Of this year’s figure, around £700,000 was paid to accountancy firm Ernst & Young and the remainder went to Pitcher Partners.
Slater and Gordon said it has brought 1,600 staff on board with the Quindell acquisition across 12 locations, bringing total headcount to almost 4,000 across the UK.
The company said the coming year will see a focus on improving cash performance across the group rather than concentrate too heavily on new acquisitions.