Xero defends 'essential' CEO pay packet as investors revolt
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The news: Xero chair David Thodey has defended the company's executive pay as almost half of shareholders vote against its remuneration report.
The numbers: Holding the Xero AGM on Thursday, the company disclosed that 48.74% of shareholders had voted against its remuneration report. The company also noted it was voluntarily putting this to a vote "as a matter of good governance" and that its outcome did not bind the company.
What they said: In his opening AGM remarks released to the ASX, Thodey argued CEO Sukhinder Singh Cassidy's controversial $25 million pay packet was justified as Xero continues to grow strongly and target global markets.
"Executing our strategy also requires world-class leadership — and a high-performing culture which is aligned with shareholder value creation," Thodey said.
"Our approach to remuneration seeks to deliver this. It is founded on strong principles that connect reward to performance and is designed to attract the world-class talent needed to deliver our global strategy."
Thodey argued that the size of the pay and the way the package was structured was reflective of Xero's status "as one of the few truly global SaaS companies on the ASX" and its place in a competitive marketplace for talent.
The context: It comes after some in market expressed disbelief at how Singh Cassidy was being incentivised, arguing that she was being paid today for growth that may not eventuate tomorrow.
It led proxy advisors Institutional Shareholder Services and Glass Lewis to advise investors to vote against the rem report, according to the Financial Review.
"While we are committed to listening and responding to this feedback, we are also committed to attracting, motivating, and retaining the global talent required to lead Xero’s global strategy," Thodey said at the AGM.
On Thursday, people and remuneration committee chair Susan Paterson said the company had held at least 50 meetings this year with different stakeholders over compensation.
