Elders gets third strike in a row against its executive pay

Agribusiness Elders Ltd (ASX: ELD) received the third strike against its remuneration report in as many years on Thursday, with investors lodging a hefty protest vote at the annual general meeting (AGM).

Under Australian corporations law, a vote of 25% or more against the remuneration report at a company’s annual general meeting constitutes a strike, with two strikes in a row triggering a vote to potentially spill the board.

Elders’ board survived such a vote at last year’s AGM, when the vote against the remuneration report ran at about 67%.

Under the law, the strike count resets after a spill vote, meaning today’s protest vote did not trigger a spill vote.

The company also received a strong protest vote against Managing Director Mark Allison’s remuneration package, with 39.6% of the vote against.

New boss not far off

While the remuneration vote this year sets the company up with a potential spill trigger if it receives another protest vote next year, this is arguably unlikely, given that current Chief Executive Officer Mark Allison’s succession plans are “well advanced”, according to Chair Glenn Davis.

Mr Allison originally announced he would retire from the company three years ago; however, he ended up staying on when a global search for a new leader failed to find a suitable candidate.

Mr Davis said on Thursday that Mr Allison was “available” to stay with the business as Chief Executive until September next year, “ensuring an orderly transition aligned with the completion of our current Eight Point Plan”.

Outlook looking good

Mr Allison told the AGM on Thursday that Elders was “optimistic” about the outlook for FY26.

Elders expects EBIT growth in FY26 driven by a positive outlook for most agricultural commodities and season. We are also looking to a strong contribution from transformation projects and Delta Agribusiness in FY26. We will continue to focus on maintaining operational and financial discipline, investing in growth opportunities, and upholding our commitment to clients as trusted partners in their agricultural enterprises and communities. With our new business structure in place, we have a clear and focused direction for stable and methodical performance to make the most of improved conditions and to remain responsive to the needs of our clients.  

Mr Allsion said the company had delivered a strong result in FY25, despite “mixed seasonal conditions and commodity market volatility”.

Elders shares have delivered a total shareholder return of just 2.3% over the past year and a negative 1.7% over the past five years, annualised, according to data sourced from CMC Markets.

Elders was valued at $1.48 billion at the close of trade on Wednesday.

The post Elders gets third strike in a row against its executive pay appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.