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Cochlear suffers first strike on executive pay

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Cochlear faces the prospect of a boardroom spill in 2013 after shareholders voiced their disapproval of the bionic ear company’s remuneration report.

Details of proxy votes lodged with the Australian Securities Exchange on Tuesday showed 30.27 per cent of Cochlear shareholders voted against the company’s remuneration report.

It is Cochlear’s first “strike” and under laws introduced in 2011, shareholders can call for a fresh election of directors if more than 25 per cent of eligible shareholders vote against the remuneration report for a second consecutive year in 2013.

Cochlear chairman Rick Holliday-Smith said he would take the concerns of shareholders on board.

“The mea culpa is, we will listen to everything everybody wants to say to us,” Mr Holliday-Smith told shareholders at Cochlear’s annual general meeting in Sydney on Tuesday.

“We will take all that information together and we will try and come up with something that is either more explainable or better or both.

“That is what we have to do over the next 12 months.”

It was also the first “strike” of the annual general meeting season.

A resolution to award chief executive Chris Roberts with $1 million worth of options passed, albeit with a sizeable 31.95 per cent no vote, according to the results of proxy voting.

The Australian Shareholders’ Association’s representative at the meeting Stephen Mayne told the gathering the resolution was destined to fail before Mr Holliday-Smith stepped in last week to pressure institutional investors to back the motion.

“You ran a very aggressive campaign with the institutions,” Mr Mayne told Mr Holliday-Smith.

“You said this was a vote of no confidence and you strong-armed them.

“You dug in and I think that was a bit disappointing.”

In response, Mr Holliday-Smith said he met with a number of shareholders and “I thought I had a sensible dialogue with those I spoke to”.

At 1349 AEDT, Cochlear was up $1.06 at $71.92.

In August, the hearing device maker’s net profit dropped to $56.8 million in the year to June 30 from $180.1 million in 2010/11, following the mass recall of Nucleus CI500 devices.