In an earlier report in Quarry online, 25 January, 2013 was ?D Day? for Penrice Soda Holdings.
At the extraordinary general meeting (EGM) in Adelaide, Penrice chairman David Trebeck received 77.8 per cent support and deputy chairman Andrew Fletcher had 78.44 per cent of votes in his favour.
A total of around 65 per cent of the company?s shareholders voted.
Three challengers proposed by dissident shareholder London City Equities (LCE) were comprehensively defeated, each receiving about 25 per cent support.
Penrice Soda is the first company to fall foul of Australia’s new “two strikes” rule. Under this rule, a board must be spilled and face re-election if more than 25 per cent of shareholders reject the company’s remuneration report two years in a row.
Penrice suffered losses and a plummeting share price leading to agitation from five per cent stakeholder LCE for board renewal.
Mr Trebeck said he was delighted with the “emphatic” result.
“Over the years, this company (LCE) and its CEO has cost Penrice a great deal in terms of administrative and legal costs,” Trebeck said. “If they now choose to be constructive and forward looking, well and good.
“Otherwise they might consider selling their shares and moving on to some more rewarding activity for them.”
Trebeck was critical of the ?two strikes? rule and also of government support for manufacturing, saying there was “unnecessary lead in the saddlebags that is making it harder than it should be for all businesses to adjust” to a higher dollar and changed trading environment.
??Shareholders who are sufficiently disgruntled with the performance of the board can always muster the numbers to requisition an EGM and move against some or all directors ? as happened with Penrice in 2009,? Trebeck said.
?However, there has also been a qualification that many shareholders have offered. They have warned us not to take the support for granted. They have reminded us that they have endured a long period without dividends and a massive fall in the value of their investment,? said Trebeck in a post-EGM statement.
?And they have put us on notice that this tolerance is not without limit. In short, they expect us to do better and the performance of the company to improve.?
The ??two-strikes?? rule was designed to deliver shareholders a greater say in the executive remuneration policies of large corporates, particularly as pay packets bulged often at odds with diminishing shareholder returns.
Penrice will now seek to appoint a non-executive director to its board with the appropriate skills and experience to replace John Hirst who was not re-elected at the October AGM.
Sources: Penrice Soda Holdings, Business Spectator, The Sydney Morning Herald