Reg Kermonde, chief executive and chairman of Cabcharge, made his views of the two-strike system clear, as the company received its second strike against its executive remuneration report at today’s annual meeting.
More than 38 per cent of shares vote against adoption of the report, triggering a vote to spill the board.
But shareholders overwhemingly voted against the spill, with more than 86 per cent voting down the resolution.
“That’s not democracy,’’ Mr Kermode said of the two strike system. ‘‘And it’s not in the interest of any companies in this country.
‘‘Shareholder democracy is always about the majority, and not the loudest voice. That is the problem with the strike system, all it measures is [the] minority.’’
A board spill has to be called if more than 25 per cent of shareholders vote against the remuneration report two years in a row.
A representative from the Australian Shareholders’ Associtiation, Allan Goldin, voted against executive remuneration but was not in favour of a board spill.
‘‘We worry about the affect [the legislation] has on the company and the reputations of the directors. It is not something that is taken lightly,’’ he said.
Mr Kermonde also addressed concern over recent Reserve Bank criticism of its 10 per cent surcharge on taxi fares paid by card.
‘‘Suggestions that our industry could survive on 5 per cent because of some as-yet unaccepted draft report to the Victorian government on the Victorian taxi industry are not realistic and are likely to be met with significant resistance,’’ he said.
Research compiled by Deutsche Bank pointed to a possible bright side for Cabcharge if it were to be forced to reduce its surcharge.
‘‘A 5 per cent cap would affect smaller competitors disproportionately. We believe that this will see some players forced out of the industry and the consolidation of market share among the larger players.’’
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