Lend Lease chief executive Greg Clarke received an ex-gratia bonus of A$2.2m (£0.89m) in the 2005-06 financial year.
According to the company’s annual report to shareholders, released yesterday, the bonus prompted a lift in Clarke’s salary package by 35% to $8.22m (£3.32m) for the year.
The payment has prompted questions from institutional shareholders as it was made in a year when the Australian developer underperformed the broader share market, delivering a total shareholder return of just 11.2% compared with the S&P/ASX 200 index returning 23.7%.
Institutional and retail shareholders yesterday expressed concern over the size of the pay increase.
Australian Shareholders Association chairman Stephen Matthews said Lend Lease chairman David Crawford should “explain more clearly the reason for the additional $2.2m, which was outside the principles spelt out in the remuneration report”.
Lend Lease’s group head of compensation John Reed said in response that the bonus was for long-term incentives granted to Clarke.
He added that the board compared the payment with 18 global peers of Lend Lease’s, including rival Australian developer Westfield and British Land, when making its decision.
The annual report reiterated Lend Lease’s optimism about future growth in its August annual results.
Lend Lease then posted an 84% increase in annual net profit to A$415.2m (£167m), boosted partly by a A$64m (£25m) property revaluation in 2005-06.
Lend Lease’s UK communities business saw a post-tax operating loss of A$14.9m (£6m), mainly due to its investment in the North Weald scheme, which was initially allocated for housing but may be prohibited due to a recommended planning change.
References: EGi News 16/10/06
