Shareholders vote down executive pay

Under probe: The waterfront of the Crown Resorts. The vote comes amid an ongoing regulatory inquiry into alleged misconduct at Crown which has raised doubts over its fitness to run casinos. — Bloomberg

SYDNEY: Shareholders of Crown Resorts Ltd voted against executive pay at the company’s AGM, a step toward removing the board, as the Australian casino giant apologised for corporate governance failings.

The vote came amid an ongoing regulatory inquiry into alleged misconduct at Crown which has raised doubts over its fitness to run casinos in the state of New South Wales, just as its A$2.2bil (US$1.6bil) gaming development nears completion on Sydney’s waterfront.

Crown’s directors and one-third owner James Packer have admitted under questioning at the inquiry that they had issued misleading public statements about the company’s involvement with Chinese junket operators potentially linked to organised crime.

They have also revealed how they failed to act on warnings which might have stopped 16 employees being jailed in China in 2016 for breaching that country’s anti-gambling laws, a scandal that derailed Crown’s Asian operations.

The inquiry also heard that Packer – who stepped down from the board in 2018 citing mental health issues – continued to receive trading updates and orchestrated takeover proposals despite having no formal role other than shareholder.

“I unreservedly apologise for these failings, ” chairwoman Helen Coonan told the virtual meeting.

“The vote... reflects dissatisfaction with the performance of the board and the company, particularly in the context of evidence coming out of the (regulatory) inquiry.”

Owners of 34.3% of Crown’s shares voted against a resolution to adopt the remuneration report, according to a slide of proxy votes displayed at the meeting, more than the 25% required to count as a vote against.

Under Australia’s “two strike” rule, if shareholders vote against a company’s remuneration report for two years in a row, they are allowed to call for a new resolution to remove the entire board.

Three Crown directors standing for re-election received more than the 50% vote they needed, but deputy chairman John Horvath said he would step down after receiving a vote of 58.4%. He told the meeting it was appropriate to quit because he relied on Packer’s vote to be re-elected.

A day earlier, Crown ended an agreement - made public by the inquiry – to share confidential information with Packer. The company is also being investigated by Australia’s financial crime agency over suspicion it failed to comply with anti-money-laundering protocols.

The stock is down about 30% since February when concerns about shutdowns associated with the new coronavirus began roiling global markets. — Reuters

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