The board of growing agribusiness TasFoods Limited is at risk of another shareholder revolt over executive pay after another difficult year.
More than 25 per cent of voting shareholders last year voted against the company's remuneration report for 2019.
If that was repeated at this year's annual meeting in Launceston on May 20 and a majority of votes then supported a board spill, the company would be forced to organise a spill meeting within 90 days to consider the board's make-up.
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Chairman Craig Treasure and directors Roger McBain and Ben Swain would automatically lose their board spots at the end of the spill meeting unless they stood for re-election at the meeting and were successful.
That would be despite Mr McBain seeking re-election at the annual meeting.
The board has recommended voting for the remuneration report and against a spill motion if one is proposed.
"The board remains confident, given the company's strategic objectives, that the remuneration framework is appropriate," Mr Treasure wrote in a letter to shareholders accompanying the annual meeting documents.
Early in 2020, he said, the board carefully set short-term incentives (STI) weighted towards financial performance and an earnings hurdle and long-term incentives (LTI) that rewarded strong share price performance.
"However, with the arrival of the COVID-19 pandemic, circumstances significantly altered," Mr Treasure said.
'' ... in the COVID-19 budget review completed in April 2020, management elected to forfeit any LTI or STI which may become payable with respect to the 2020 financial year.
"As a result during 2020, no long-term incentives were granted and no short-term incentives were paid, and only fixed remuneration was received."
TasFoods reported a $6.41 million after tax loss for a "very challenging" 2020.
Revenue increased by 32 per cent, helped by 92 per cent growth in sales from the dairy division, including 2019 acquisition Betta Milk.
Impairment expense of $3.5 million and a $1.2 million writedown of the fair value of the wasabi crop hit the result.
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Sean Ford
The Advocate Newspaper, Tasmania. Business, economics, politics, crime.
The Advocate Newspaper, Tasmania. Business, economics, politics, crime.
