Pacific Brands’ senior executives have had their pay packets frozen and incentives cut following a blowout in losses at the struggling clothing maker.
In the company’s annual report released on Monday, Pacific Brands said a salary freeze had been imposed on its new chief executive and all other top executives for the 2013 financial year.
Short-term incentives had been cut by 50 per cent and directors fees reduced by a quarter.
The move comes after the company’s executives endured cuts to their remunerations packages, including incentives, in 2011/12.
It also signals the company behind brands including Bonds, Grosby and Berlei, took note of the shareholder anger at executive-pay levels expressed during its annual meeting last October.
The company’s annual report showed its senior executives had their pay packets cut and incentive payments axed in 2011/12, when Pacific Brands’ losses widened to $450.7 million from a $131.9 million deficit the previous year.
Former chief executive Sue Morphet, who stepped down on September 3, had her total remuneration package cut by 14.9 per cent to $1.6 million in 2011/12.
Her fixed salary fell to $1.2 million from $1.4 million, and she collected no short-term incentives (STIs), which had been in the form of a $910,000 cash bonus the previous year.
The remuneration packages of the company’s other top executives were cut by between 14 and 23 per cent.
They received no STIs, which had been worth between about $183,000 and $506,000 in 2010/11.
Pacific Brands said it had devised a new remuneration strategy around the time of last October’s annual meeting.
It had taken into account shareholder feedback and the company’s reduced size, market capitalisation and the ongoing tough trading conditions it faced.
“As the company’s performance in the 2012 financial year fell short of internal targets, no STIs were paid to senior executives in relation to this year,” the annual report said.
“The board also determined that it was not appropriate to approve payment of the personal STI component to senior executives in the circumstances.
“In addition, no performance rights vested under the company’s LTI (long-term incentive) plan following the end of the financial year.”
Ms Morphet’s replacement, former Foster’s boss John Pollaers, will receive fixed annual remuneration of $1.4 million plus incentives for his first year in the top job.
Last October, Pacific Brands’ board was put on notice by shareholders who rejected what they termed an excessive remuneration package for senior executives who failed to meet performance targets.
More than 50 per cent of shareholder votes were cast against the passing of the company’s remuneration report for 2010/11.
New “two strikes” legislation gives shareholders the right to call for a re-election of non-executive board members if 25 per cent of shareholders vote against a remuneration package two years in a row.
