Fortescue hit with first strike on executive pay amid $1.1 billion green spend
Andrew Forrest's Fortescue Metals Group will invest $1.1 billion in new green hydrogen projects. Photo: AAP
Fortescue Metals Group is the latest Australian company to be hit by a shareholder revolt over executive pay, following several senior management changes in the past few years.
Less than 47.6 per cent of votes were cast against Fortescue’s remuneration report at its annual meeting on Tuesday, far less than the 75 per cent supermajority required.
While the vote is advisory only and there’s no immediate impact on Fortescue, a second strike next year would trigger an automatic vote on a board spill resolution that would force every company director to stand for re-election.
Among the top executives that have left Fortescue in the past three years include chief executive Fiona Hicks in August, after just six months on the job. Chief financial officer Christine Morris followed her out the door days later, after just two months in the role.
The departures are believed to stem from disputes with executive chairman Andrew “Twiggy” Forrest about the pace of Fortescue’s transformation from an iron ore miner into a green energy company.
Forrest waxed passionately on the subject on Tuesday, as Fortescue also announced three of the first green hydrogen deals to reach a final investment decision in the US and Australia
“So many people now believe that a mining company can also be the most responsible climate company in the world,” Forrest told shareholders.
Last year had been a climate “disaster”, Forrest said, with six unprecedented warming events occurring around the planet.
“Dressed as the Grim Reaper, climate change is in the kitchen, your homes, it’s at the boardroom table – the heating climate is coming to you,” he said.
But with investments in green energy, “we can save the planet for our kids”.
Forrest said Fortescue was linking executive bonuses across the company to meeting emission reduction targets, and called on all companies around the world to do the same.
Earlier on Tuesday, Fortescue announced its board had approved the Phoenix hydrogen hub in the US, a green hydrogen project in Gladstone, Queensland, and a green iron trial plant in Western Australia.
But a Gibson Island green hydrogen and ammonia project in Queensland is yet to reach the investment milestone.
It “requires further work as Australia struggles to shed its petro-state status and still suffers structurally high green electricity costs”, the company said.
The estimated total investment in the three approved projects is about $US750 million ($1.1 billion) over the next three years.