QBE chief’s payout slashed
QBE CEO Frank O’Halloran’s retirement payout has been slashed after the group’s board bowed to possible pressure from shareholders and is now limiting it to one year’s salary.
A report by financial risk manager RiskMetrics advised its subscribers to reject QBE’s remuneration report, which it said would see Mr O’Halloran receive a payout of $7.35 million plus options if he were to retire or be terminated.
“This benefit is excessive by Australian investor standards,” the report said.
It also recommends that Chairman John Cloney be ejected as a director of the company because he is not independent, having served as CEO for 17 years until 1998.
A message to investors from Mr Cloney says that as of March 31, Mr O’Halloran’s retirement benefit has been amended to a lump sum payment of one year’s annual base salary.
Previously the CEO was to be paid a lump sum payment of 150% of both his annual salary and his short-term cash incentive for the year.
“The wealth of the CEO is irrelevant for voting ‘for’ or ‘against’ the remuneration report,” Mr Cloney said.
“The reality is [that] significant targets need to be achieved to earn a short-term cash incentive. The deferred element could have also been paid in cash, [but] it is provided in the form of stock to align with shareholder interests and to retain executives.”
RiskMetrics says Mr O’Halloran’s total remuneration last year increased 12% from $1.87 million to $2.095 million with no explanation other than that fixed pay is based on market data. His maximum potential bonus also rose from $2.5 million to $2.8 million.
A report by financial risk manager RiskMetrics advised its subscribers to reject QBE’s remuneration report, which it said would see Mr O’Halloran receive a payout of $7.35 million plus options if he were to retire or be terminated.
“This benefit is excessive by Australian investor standards,” the report said.
It also recommends that Chairman John Cloney be ejected as a director of the company because he is not independent, having served as CEO for 17 years until 1998.
A message to investors from Mr Cloney says that as of March 31, Mr O’Halloran’s retirement benefit has been amended to a lump sum payment of one year’s annual base salary.
Previously the CEO was to be paid a lump sum payment of 150% of both his annual salary and his short-term cash incentive for the year.
“The wealth of the CEO is irrelevant for voting ‘for’ or ‘against’ the remuneration report,” Mr Cloney said.
“The reality is [that] significant targets need to be achieved to earn a short-term cash incentive. The deferred element could have also been paid in cash, [but] it is provided in the form of stock to align with shareholder interests and to retain executives.”
RiskMetrics says Mr O’Halloran’s total remuneration last year increased 12% from $1.87 million to $2.095 million with no explanation other than that fixed pay is based on market data. His maximum potential bonus also rose from $2.5 million to $2.8 million.