Credit: Pete Alexopoulos via Unsplash
ARN Media shareholders, suffering a steep fall in the value of their shares, threw pain back at the audio media company, overwhelmingly voting against executive pay packages presented to the annual general meeting (AGM) today
The company also revealed that “brand safety” issues cost the radio company more than $26 million in lost revenue from concerned advertisers.
This was not, during AGM proceedings, linked to the cancelled Kyle and Jackie O show but the company expects the return of lost advertisers this year.
At the AGM, more than 90% of shareholders voted against the remuneration report.
This is officially a first strike. A second such vote would trigger a spill of the board of directors, making their positions vacant.
The new CEO, Michael Stephenson, the former Nine chief revenue officer, is on a base of $1.1 million, plus superannuation, but could more than double this with short and long term incentives.
Chair Hamish McLennan told shareholders the board recognises that remuneration is a key accountability mechanism.
“We have structured management incentives to be market-competitive, transparent and tightly aligned to shareholder outcomes,” he said.
“Fixed remuneration provides stability to attract and retain the leadership capability required to execute a complex transformation, while variable remuneration is meaningfully weighted to at-risk outcomes and subject to robust governance, including independent benchmarking, clear performance gateways and Board discretion.”
He said the long-term incentive framework is anchored to an earnings per share KPI that is aspirational and stretching, requiring compounding growth of 26% to 31% a year out to 2029
ARN reported revenue down 10% to $285 million in the year to December, impacted by a challenging market and changing advertiser expectations.
The company has reset its strategy to position ARN as an entertainment business with digital and radio at its core.
But its share price has tanked, falling more than half to be trading at 26.5 cents.
The CEO told shareholders that of the $28 million decline in metro radio revenues, $6 million can be attributed to a tough advertising market.
“The remaining $22 million is related to clients who had chosen not to advertise with ARN because of issues relating to brand safety,” Stephenson said.
“This issue also impacted regional revenues………Regional revenues declined by $5.3m for the period with $4.4m coming predominately from national advertisers who had chosen not to advertise with ARN because of concerns with brand safety.
“Over time, we expect a significant percentage of the $26 million of revenue that was lost last year because of brand safety concerns to return, improving both our metro radio revenue and revenue share.”
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