QBE shareholders’ strike

Executive remuneration report rejected at AGM

QBE Insurance has received a first strike against its executive salary plan with more than 45 per cent of shareholders voting to reject the remuneration report which includes large short term bonuses.

At the annual meeting yesterday, QBE said it had restructured its management and reduced its exposure to operations in South American and Asia, as it attempts to recover from a record $1.6 billion loss for the year to December.

In the first quarter of the new financial year QBE also said it had increased premium prices by 4 per cent, reduced its debt ratio from 41 per cent to 37 per cent and said its underwriting costs were on track with forecasts.

However, the insurance company’s return on investments was already below target, QBE’s new chief executive Pat Regan said.

QBE shareholder Local Government Super confirmed it had voted against the remuneration report because the executive payouts did not reflect the poor performance of the company.

“It provided for large bonuses based on the company’s short-term performance,” Local Government Super spokesman Bill Hartnett said yesterday. “The bonuses were too high and misaligned with the results of the company. We voted against on the basis of disappointing profit results while over the past year QBE shares have also declined by more than 10 per cent,” Mr Hartnett said.

The super fund, which has $11 billion under management, also submitted a resolution to the meeting to change the company’s constitution to force the board to provide greater disclosure to shareholders about the insurance risks from climate change.

During the past year QBE said it had booked a record $1.2 billion in reinsurance losses from “weather related catastrophes”.

However, QBE chairman Marty Becker told shareholders to vote against the resolution because it could lead to small groups of shareholders having too much influence on the board’s strategy.

“Your board is firmly of the view that passing this resolution would not be in the interests of all shareholders,” Mr Becker said.

Since the meeting was called, however, the QBE board, agreed to adopt the recommendations of the Financial Stability Board’s taskforce on climate-related financial disclosures (TCFD).

If more than 25 per cent of shareholders vote against a remuneration report it receives a strike.