Shareholders revolt at Slater & Gordon AGM

EXECUTIVES at beleaguered law firm Slater & Gordon are to receive a bonus, despite a shareholder revolt at its annual general meeting.

Around 43% of the Australian stock exchange listed company’s shareholders voted against the company’s remuneration report at the meeting in Melbourne today.

Slater & Gordon’s share price has collapsed over the last year, following its disastrous £673m acquisition of the professional services arm of Watchstone Group, previously called Quindell, in the UK.

At the AGM, chairman John Skippen said: “We are very disappointed that we had to make such a large write off relating to the Slater Gordon Solutions acquisition and are very concerned by the under performance of our UK operations in general.

“In February I offered shareholders an apology on behalf of the board and I reiterate that apology today.

“We are sorry for the financial losses you have suffered and as a board we are doing everything we can to ensure the group’s financial performance is restored to sustainable levels as quickly as possible.”

He added that the UK business remains “in a process of transition” as a performance improvement programme continues. UK headcount has been reduced by 16% and operating sites will be reduced from 47 to 32 by January 2017, with further sites set to be closed during the remainder of 2017.

“While we are making progress there are still challenges and a lot more work that needs to be done to build a sustainable business in the UK,” he added.

Andrew Grech, the group’s managing director who is based in the UK, is one beneficiary of a bonus package approved at the meeting despite the firm paying no dividend this year.

Cash bonuses will also be paid to chief financial officer Bryce Houghton and chief operating officer Felicity Pantelidis. $189,600 and $93,750 bonuses, respectively.

Skippen said although Grech is being issued performance rights, they will be cancelled, as they were for 2016, if performance hurdles are not met.

He said: “At the time of the announcement of Slater & Gordon’s half year results, I told you that Andrew Grech had offered his resignation to the board.

“I said at the time the board’s view was, (and this remains) that Andrew has the skills and experience needed to lead the company through this period of change.

“It is unlikely that the company would be able to successfully recruit a senior executive with the same mix of skills and industry knowledge.

“Andrew is committed to the company and has been based in the UK full time since January and has agreed to remain there as long as required to ensure we achieve a steady profitable state in the UK business.

“The board believes the fundamental driver for remuneration should be long term shareholder value creation and to achieve this Andrew’s package includes a mix of components focused on promoting long term, sustainable shareholder value.”

Slater & Gordon employs 3,800 people across offices in the UK, including Manchester, Liverpool, Preston, and Chester.

Its share price fell by 2.78% to 22p (A$0.35) today.