Santos shareholders vote against CEO incentive

May 6, 2022

Continued shareholder resistance against Santos could result in a call to oust the board

One-quarter of shareholders in Australian energy company Santos have voted against the company’s executive pay plans, according to Reuters

Santos’ pay plans included an incentive of over US$4.2 million, or AU$6 million, for its chief executive officer, Kevin Gallagher, tied to performance hurdles and the delivery of major growth products. 

The incentive also included the successful delivery of the company’s energy transition strategy to 2025. 

However, 25.32% of Santos shareholders voted against the pay plan, condemning Gallagher’s incentive as “excessive”. 

If shareholders reject the pay plan again it could result in a call to oust the board under Australian laws.  

The company, however, defended itself against its pay plan, with chairman Keith Spence stating: “The Board considers the strong leadership of our CEO Kevin Gallagher and Key Management Personnel is appropriately recognised in the 2021 remuneration outcome.” 

The criticism comes after Kevin Gallagher was awarded a bonus of the same amount in 2021. 

The bonus tied Gallagher to Santos for another five years amid rumours that he was a potential candidate for a top executive job at Santos’ rival, Woodside Petroleum. 

Meanwhile, a greater portion of shareholders, 36.98%, voted against Santos’ climate plan. This marks the highest levels of dissent expressed thus far against an Australian company’s climate plan. It could also spell further issues for the company’s board.

The Australiasian Centre for Corporate Responsibility is taking Santos to court for greenwashing their climate commitments.

Catch up on the latest analysis of the Australian market by reading Minerva’s 2021 Australia Proxy Season Review. In the review, we also look ahead to predict the major developments of the 2022 Proxy season. You can also watch a short video briefing on the review below.

Last Updated: 6 May 2022