Harvey Norman shareholders refuse executive pay rise

By Paul Hayes

SYDNEY, NSW: Following weaker than expected third quarter sales results, the board of Harvey Norman last week again surprised the industry by scrapping a proposed share options package for six of its executive directors.

The retailer announced late last Friday that it had cancelled a scheduled extraordinary general meeting at which shareholders were due to vote on the issue of 17.5 million share options.

The meeting, scheduled for Friday 30 April, was cancelled after shareholders made it clear they would not vote in favour of the share options, which would have resulted in increased salaries for the executives.

Harvey Norman executive chairman, Gerry Harvey, told the Sydney Morning Herald that shareholders found the shares too easy to obtain.

“We checked with our major shareholders and they wouldn’t vote for it, so we had to pull it,” said Harvey.

“They reckoned it was too easy to get the options, the hurdles were too easy.”

Harvey Norman’s decision came just days after the company announced flat sales figures for the previous three months, with overall sales rising just 2.2 per cent over the previous nine months for a total of $4.64 billion.

News of the weaker than expected numbers caused the retailer’s shares to fall by more than five per cent, its largest such decline since October last year.

Current.com.au has contacted Harvey Norman chief financial officer, Chris Mentis, and will publish any comments as they come to hand.

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