Influential advisers to large shareholders plan to protest against excessive exit packages for Leighton Holdings' former top executives at the contractor's annual meeting next month as some criticise its new Spanish chief executive for failing to address minority investors' concerns.
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"The Spanish have been very unresponsive," said Aaron Bertinetti, a director of CGI Glass Lewis. He said Leighton's new CEO, Marcelino Fernandez Verdes, had recently dropped out of a conference call on corporate governance and remuneration with the proxy group and other Leighton executives.
"Marcelino was supposed to be on the call and didn't turn up; he cancelled five minutes before,'' Mr Bertinetti said.
"He clearly had no interest in engaging on these type of issues … but he's supposed to be the one reaching out to investors and stakeholders."
Ulysses Chioatto, head of research at ISS, said the proxy group did not typically discuss corporate governance issues with CEOs but had had "extensive, robust and in-depth" discussions with Leighton's chairman, Bob Humphris.
Proxy groups are reviewing Leighton's remuneration policies ahead of its annual meeting on May 19 and have not decided on voting recommendations.
However, they expect to criticise some aspects of the large exit packages approved by Mr Fernandez Verdes after he ousted former Leighton chief executive Hamish Tyrwhitt and former chief financial officer Peter Gregg.
Mr Tyrwhitt's cash package includes $2.5 million in fixed remuneration; $10.2 million in lieu of unvested equity options; $134,615 for "transitional services" between March 13 and March 28 after he was fired; up to $10,000 in legal costs associated with negotiating his termination package; and up to $5000 for "incidental" benefits that he retains from Leighton such as a mobile phone and iPad. It also includes an office with an executive assistant, IT and phone services, as well as mobile and home internet access for up to 12 months or until Mr Tyrwhitt finds a new full-time job.
Mr Gregg's cash package include $1.8 million in fixed remuneration; $8.2 million in lieu of unvested equity options; $96,923 for "transitional services" between March 13 and March 28; up to $10,000 in legal costs; and up to $5000 in incidental benefits from Leighton.
Two independent directors will remain on the board - Mr Humphris and engineer Michael Hutchinson, former director of Hastings Funds Management and Westpac Funds Management. Three of Leighton's independent directors - deputy chairman Paula Dwyer, Russell Higgins and Vicki McFadden - will resign or retire by Leighton's AGM.
Two Spaniards will join the board - engineer and former politician Pedro Lopez Jimenez and lawyer Jose Luis del Valle Perez, a director at Spain's Grupo ACS, the owner of Hochtief.
