Primary Health Care chairman Rob Ferguson says the company will work harder to listen to investor concerns, after a shareholder backlash delivered the company its first strike on executive pay and could depose longstanding director Brian Ball.
The medical centre and diagnostic operator's annual meeting was the first after the retirement of founding managing director Edmund Bateman on Monday. Bateman, 72, remains a director but did not attend, because he was still on sick leave.
Acting managing director Andrew Duff, Mr Ferguson and Mr Ball all paid tribute to the legacy of Dr Bateman, who he started Primary from one clinic on Sydney's northern beaches almost 30 years ago. However, shareholders were not in the mood for nostalgia.
About 38 per cent of votes cast before the meeting were against the remuneration report. Under corporate law two consecutive remuneration strikes of votes of 25 per cent or more against lead to a board spill.
Shareholders complained that long-term incentive payments were paid in cash, as opposed to equity.
Mr Ball, who is considered by some proxy firms to have lost his independence after more than a decade on the board, received proxy votes of 56 per cent against his re-election. However after a poll he was re-elected by a slim margin, with 47 per cent of votes against.
Even Dr Bateman's son Henry, who runs the medical centres and is an executive director, had 38 per cent of proxy votes cast against his re-election.
Mr Ferguson said the company would reconsider its executive pay structure but noted the remuneration vote was often an opportunity for shareholders to make themselves heard on other issues too.
"I take it as a message that we've got to communicate better," he said. "We've got that message loud and clear through these votes.
"Some people say that we're hard to communicate with and they've been trying to get points over. I think we do listen but we have got to try harder in those areas."
The final poll results taken on each resolution at the meeting will be released to the markets this afternoon.
Mr Duff told shareholders the company was on track to hit guidance provided in August of earnings per share growth of 5 to 12 per cent for 2014-15. The company expects to record full-year earnings before interest, tax, depreciation and amortisation of $410 million to $425 million.
Mr Duff has been acting managing director in the absence of Dr Bateman.
Dr Bateman's retirement was disclosed on Monday. He will formally step down at the end of January to become a non-executive director of the company.
