Megaport gets first strike on pay after share price drop

The news: Shareholders in Megaport have delivered a first strike against executive pay, less than a week after the network solutions provider's price tanked on a weak quarterly update.

The numbers: More than a quarter of votes were opposed to the group's remuneration report, while almost 48% rejected chief executive Michael Reid's long-term stock incentives. Reid performed better on short-term incentives, with only 32% of votes opposed. Megaport shares tanked more than 16% last Wednesday after the company posted a quarterly update which, despite showing encouraging signs on cashflow, delivered poor customer growth. MP1 shares have not recovered much of last week's drop, but are up slightly by 0.4% today, fetching $9.55 at 1:15pm AEDT.

The context: Megaport has been in the process of transitioning into a cash positive business, which it achieved for the first time in 2023's fourth quarter. The company's forward guidance expects positive net cash flow in 2024, excluding strategic investments.

What they said: "As we progress further into FY24, we remain focused on achieving sustainable and profitable growth, with the company continuing to return record EBITDA and positive net cash flow performance in line with our guidance," Reid told shareholders at Wednesday's AGM.