Crown Resorts was given a second rap by shareholders over its plans to pay millions to departing executives, although it survived a spillover motion that would have ousted the entire board.
The operator held a virtual annual general meeting on Thursday at which more than 30 percent of investors voting by proxy rejected the remuneration packages for a second year in a row. The level is above the 25 percent threshold for the vote to be considered a no and triggered the spill motion. This was rejected by almost 96 percent.
In her address to the AGM, interim Chair Jane Halton defended the exit packages, as well as the compensation proposed for incoming CEO Steve McCann.
“We have seen very significant and almost unprecedented change in our senior management, many of whom were long-standing executives. The changes to our organisational structure and leadership were required to accelerate and progress the implementation of Crown’s transformation and remediation programs,” she wrote.
“The Board carefully reviewed each executive’s termination arrangements, our legal obligations and the surrounding circumstances at the time these decisions were made, including obtaining advice. In this context, the Board considers its decisions on the termination payments to former senior executives were made in the best interests of shareholders having regard to the circumstances facing the company.”
Crown has seen a complete overhaul of its board and management since an inquiry into its business practices in New South Wales found that it was unsuitable to hold a license for its Barangaroo resort in Sydney. It has since embarked on a wide-scale remediation program in an attempt to regain suitability. Regulators in Victoria and Western Australia are also considering Crown’s suitability after separate Royal Commission inquiries in those states found widespread irregularities including money laundering.
McCann, who was confirmed as CEO on Wednesday after receiving regulatory approvals, updated investors on some of the measures that Crown was undertaking to fundamentally change the corporate culture that had lead to the governance lapses.
“A substantial culture reform program is underway across the business. We have refreshed our Purpose and Values and are embedding a new way of working,” he said.
“We are substantially upgrading our processes and systems to make it easy for our people to perform at their best, to manage risk appropriately, and to provide transparent and accurate information. We are creating an environment which will help our people to act with integrity and care, and to speak up around any issues that do not align with our values.”