Proxy advisors say coal mining is a “divisive and controversial” industry and executives like Whitehaven Coal boss Paul Flynn therefore deserve to be paid a premium wage compared to executives in other sectors.
The Whitehaven board faces a spill motion if more than 25 per cent of shareholders vote against this year’s remuneration report and thereby give the company a “second strike”. “While the board appreciates concerns regarding high fixed pay of the CEO, following this benchmarking exercise, the board determined that executive KMP fixed remuneration should increase, as attracting and retaining top talent to the coal industry necessitates a fixed pay premium,” said the company in its latest remuneration report.
The Whitehaven share price closed at $10.49 on Friday, up from $2.89 a year ago, as it announced completion of an initial 10 per cent share buyback.Whitehaven started the on-market share buyback on March 8, buying 103.3 million shares at an average price of $5.69 apiece and total cost of $587.9 million by October 20.
The price for top-quality NSW thermal coal has been averaging more than $US397 a tonne in each of the past five months, according to figures from GlobalCoal.And key trading partners, including customers in Japan, have expressed concern it will stay well above $US300 a tonne for the next few years amid a global energy crisis and approval hurdles limiting the prospect of new supply out of Australia.
It also said Mr Flynn’s pay was not out of step with the fixed remuneration packages of recent chief executives at smaller ASX-listed coal mining peers New Hope and Yancoal.