Kelsian Group board receives first strike on remuneration report
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The news: Kelsian Group’s board received a first strike from its shareholders over its remuneration report at its annual general meeting today.
The numbers: About 74.9% of shareholders voted in favour of the remuneration report, narrowly missing the 75% needed to pass the resolution.
Kelsian’s shares were down 0.49% to $4.09 by 1:00pm AEDT and have dropped 32.4% over the past 12 months. Its current share price is well below the $10.27 peak it reached in May 2021.
The context: The company’s chair Fiona Hele said in her address at the AGM that there had been “significant improvement to the remuneration framework” but said there was more to do.
Hele said that the board acknowledged the need to better align key performance drivers with the remuneration framework, while also improving reporting transparency.
In August, the company’s shares plunged after the bus and ferry operator's indicative unaudited full-year results revealed higher-than-expected capital expenditure in FY25.
Hele said this overshadowed the “record FY24” result and that the board approved these investments as “highly commercial and strategic initiatives to support continued growth in the medium and longer term”.
She also said “with the benefit of hindsight” the board could have handled communication differently, including releasing the full unaudited accounts and holding an investor call with the release of the capex update.
During the AGM, Kelsian reaffirmed its guidance for FY25 EBITDA of between $283 million and $295 million, with a skew to the second half.
Group chief executive and managing director Clint Feuerherdt said the company said the company would prioritise cash generation and anticipated that capex would decline sharply in FY26, with the free cash generated being used to reduce leverage.
What they said: “This is a disappointing outcome,” Hele said.
“... Clearly, there is more for the board to do; including but not limited to ensuring our remuneration is sufficiently competitive to attract and retain talent for our evolving and growing business, while ensuring it falls within a remuneration structure that aligns executives to grow the business, be more operationally efficient, and deliver long-term shareholder value with sustainable and appropriate returns.
I’m pleased to share with you today that the board has committed to introducing appropriate capital returns based measures into our remuneration framework to apply from FY26.”
The sources: ASX announcement, ASX announcement
