Seven West Media has narrowly avoided a first strike over executive pay at its annual general meeting.
Nearly 24 per cent of shareholders voted against the company’s remuneration report, just shy of the required 25 per cent.
The board might have been saved by a decision to drop plans to increase the fee pool for directors’ pay by 20 per cent from $1.5 million to $1.8 million.
The two-strikes rule can force a board spill if a company receives two consecutive votes of 25 per cent or more against its executive pay plans.
The diversified media group owns the market leading Seven TV network, the West Australian and associated newspapers, magazines, Yahoo!7 digital joint venture and radio stations.
There has been shareholder anger about former chief executive David Leckie receiving more than $4.6 million for the year, despite leaving in June when former Woodside Petroleum boss Don Voelte took up the top job.
Seven West’s chairman and largest shareholder, Kerry Stokes, acknowledged the shareholder frustration with the company’s share price, which had plunged by 70 per cent from a year-high of $3.80 in March.
He said it did not reflect the business or its competitive success.
“Personally I wish I could wave a magic wand to improve our share price,” he said.
The market appeared to listen, with Seven West’s shares soaring by 21 per cent during the day before closing 11.2 per cent, or 13 cents, higher at $1.29 on Tuesday.
Mr Voelte told shareholders that the group had implemented restructuring that would reduce this year’s capital budget by $14 million and deliver $60 million in improved revenue and reduced expenses.
The restructure would achieve $50 million in annual cost savings by fiscal 2014, he said.
Mr Voelte said the board and management would have no “no emotional attachment” to any part of the business when it cut costs.
The company offered 15 editorial staff redundancies at the West Australian newspaper in September.
The Perth newspaper’s circulation rose for a fifth consecutive year, in contrast to the plummeting circulation for east coast newspapers, which are slashing costs and jobs.
Advertising revenues were down in TV and publishing and action had to be taken, Mr Voelte said.
“Very little is sacred in the terms of costs or the way we do business, he said.
“Nor are we naively assuming that the old way is the right way.”
Seven West said it expected lower first half earnings in a difficult media market, with about $250 million in earnings before interest and tax and several million dollars to be taken from that figure for one-off restructuring.
The company still aims to achieve a rise in net profit from last year’s $226.9 million.
