IS Harvey Norman Screwing Shareholders While Rewarding Directors?
On Monday we revealed that Gerry Harvey dished out a 54% pay rise by adding an extra million to his wife Katie Pages salary shareholders weren’t impressed, with three-quarters of votes opposing the remuneration report at yesterday’s AGM.
Gerry Harvey’s pay rose to $1.1 million, from the previous year’s $1 million, and chief executive Katie Page enjoyed a 54 per cent pay rise to $2.8 million.
Two other senior executives who actually stayed at the Company after other senior executives chose to leave last year, were awarded 14 per cent pay rises.
Gerry Harvey told attendees that the vote would have no consequences, despite the prospect of a board spill next year if at least a quarter of shareholders again reject executive salaries.
“Nothing will change,” he said.
Mr Harvey holds a 30 per cent stake in the company, and the board would just re-form again if there was a second strike, he added.
“I understand where they’re coming from and that’s fine, but in the big picture I wonder whether it’s all worth it.”
The Australian Shareholders Association objected to Mr Harvey’s short-term incentives being paid only in cash, rather than a mix of cash and shares.
Meanwhile, Mr Harvey was upbeat about the Christmas sales period, and forecast a turnaround in the retailer’s loss-making Irish business.
“There’s no reason to believe we shouldn’t have a pretty good Christmas,” he told shareholders.
Harvey Norman has also launched a $120.7 million capital raising, offering new shares to current investors at $2.50 each to fund a 14 cent per share special dividend.
The $140 million to be returned to shareholders through the special dividend is a way of distributing franking credits that have accumulated over many years, Mr Harvey said.
“I’ve been criticised now for 10 or 15 years, at least, every year for not doing anything about it and it’s fairly valid criticism,” he said.
Harvey Norman shares finished flat at $3.71.