ARN shareholders urged to vote against executive pay, CEO bonus
A major proxy advisor has recommended that shareholders of ARN Media vote against executive pay and a CEO bonus at the company’s annual general meeting next week.
Proxy adviser Institutional Shareholder Services issued a report to its client last week urging them to vote against granting CEO Ciaran Davis performance rights worth north of $860,000, as well as voting against executive pay.
According to Capital Brief, ISS argues a vote against remuneration is warranted because specific earnings targets were not outlined.
“Shareholders in this market are typically concerned with bonuses which are not linked to rigorous performance targets over a sufficient performance period of at least three years, being the minimum accepted in this market as being aligned with long term shareholder interests,” the ISS report reads.
Ciaran Davis
During last year’s annual general meeting, held in May, 84% of shareholders voted in favour of a two-year scheme that would see Davis receive performance rights, with a vesting date of December 31 this year. The shareholders also voted 79.75% in favour of executive renumeration.
The vote occurred the day after ARN advised the stock market that Anchorage Capital Partners had withdrawn from a consortium that had lobbed a $250 million takeover bid of rival Southern Cross Austereo. ARN advised shareholders it intended to engage with SCA on a revised proposal, however this was rejected as inadequate by SCA.
The “significant costs” incurred by the failed takeover saw ARN’s FY24 profits dive from $32.3 million the previous year to $14.3 million, despite earnings being up 21.5%.
Towards the end of 2023, ARN signed Kyle and Jackie O to a historic ten-year deal worth $200 million, however the pair have failed to find their footing in key radio market Melbourne, netting just 5% of the breakfast audience, despite the millions spent on marketing.
In addition, Sandilands had a public health scare, which rocked investors during ARN’s full-year 2024 results call in late February.
ARN’s $200 million bet.
The full-year results were also used to announce $40 million in cost cutting over the next three years. At the time, Davis told Mumbrella the cuts would drive “a total transformation of what we’re looking at from an operating model perspective … we need to and want to be able to make investments in the key areas around content, in distribution, and in the monetisation of it.”
Davis promised more clarity about the cost cutting would be given to the market around August, during ARN’s half-year results.
ARN’s annual general meeting will be held on May 8.
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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