At the recent annual general meeting (AGM) of Australian Radio Network (ARN), over 90 per cent of shareholders rejected the company’s executive pay report, marking it as one of the most significant remuneration strikes in Australia’s corporate history. This is a greater repudiation than that faced by Qantas, which saw an 83 per cent vote against its resolution last year, and NAB’s 88 per cent dissent in 2018 after the banking royal commission.
The contentious pay report included a $1.1 million salary for newly appointed CEO Michael Stephenson. Given the overwhelming negative feedback, ARN will need to revise the remuneration report to address shareholder concerns. A subsequent rejection of 25 per cent or more in future votes could prompt a spill motion aimed at the board of ARN.
Chairman Hamish McLennan addressed the shareholders regarding the ongoing legal disputes involving former radio hosts Kyle Sandilands and Jackie “O” Henderson, who are entangled in lawsuits totalling $170 million. He reassured investors of ARN’s commitment to defending these claims while stating there would be no further comments as the matters are currently before the court. Despite calls for his resignation linked to ARN’s handling of the situation, McLennan was re-elected as chairman with a solid 80 per cent support and pledged to invest $500,000 back into the company as a show of confidence.
Prior to the AGM, Stephenson highlighted the network’s financial struggles, noting a $26 million drop in advertising revenue over the previous year, largely driven by concerns from clients about “brand safety.” He specified that $22 million of this loss was explicitly due to clients opting not to advertise with ARN for reasons tied to these safety concerns, though he anticipates a recovery in revenue as these issues are addressed.
Both Sandilands and Henderson are suing ARN following a dramatic incident on-air that resulted in a fallout from their top-rated show. They are seeking full compensation for the remaining portions of their lucrative 10-year contracts, which totalled $100 million and were expected to end in 2034.
The AGM’s outcomes reflect substantial shareholder discontent, and ARN will need to navigate the fallout from both the remuneration debate and legal challenges as it seeks to restore confidence among investors and clients alike.