Shareholders of mining company Fortescue deliver protest vote against executive pay plans

Iron ore miner Fortescue received a stern rebuke of its executive pay plans on Tuesday, with shareholders registering a strike against the company after a tumultuous period of senior staff turnover.

The Andrew Forrest-chaired company lost the chief executive of its mining business, its chief financial officer and a high-profile former director in quick succession earlier this year, causing shareholder angst.

Investor groups raised concerns over the lack of detail that accompanied the departures, as well as some specific pay decisions, which helped fuel a 52% protest vote against the remuneration report at the annual general meeting in Perth.

This was well above the 25% required to trigger a strike.

Under rules designed to hold directors accountable for executive pay, a second strike against the remuneration report next year would give investors a chance to spill the board.

Fortescue director Penny Bingham-Hall, who chairs the remuneration committee, said the company had not got “all of our remuneration issues right”.

“We will work together to ensure that our remuneration aligns with shareholder expectations as we go forward because retaining the talent we’ve got is incredibly important,” Bingham-Hall told shareholders on Tuesday.

Shares in Fortescue were trading near their all-time high on Tuesday amid strong iron ore prices, a scenario that would usually see shareholders approve a company’s pay plans.

But many investors remain cautious about Fortescue’s planned transition into a green energy company, given its expertise is in mining iron ore, used in steel production.

Fortescue plans to decarbonise its mining operations by 2030 without the long-term use of controversial carbon offsets, while simultaneously creating a hydrogen-led green energy arm. Its iron ore business is providing the capital to do so.

On Tuesday, it lit the fuse on those plans by approving an estimated $US750m ($A1.14bn) investment over three years in two hydrogen projects and one green steel facility.

The Perth-headquartered company made final investment decisions for a hydrogen hub near Phoenix in the US and a hydrogen project in Gladstone, Queensland. It also plans to invest in a commercial plant in Western Australia to produce steel made with hydrogen rather than coal.

“This is the start of a pipeline of green energy projects we are dedicated to delivering,” Mark Hutchinson, the head of Fortescue’s clean energy division, said.

Forrest, who has a hands-on role at the company through his position as executive chair, used his opening address at the AGM to criticise the gas industry, denouncing the ongoing use of fossil fuels as an energy source.

He told shareholders that methane emissions from gas usage only exacerbated global heating, making it problematic to suggest it could be used to help in clean energy transition.

“It’s this collective act of the suspension of critical thinking to think we can embrace the fossil fuel industry while stopping climate change,” Forrest said.

The billionaire miner also dismissed any role for blue hydrogen, produced mainly from natural gas, as a clean energy source.

“So-called blue hydrogen is a fake and making the climate worse,” Forrest said.

The majority of Forrest’s executive team have left or shifted roles since 2021. This includes the abrupt departure of Fiona Hick, a former oil and gas executive who left Fortescue in late August after running the mining business for just six months.

Forrest has previously defended the high level of executive turnover, describing it as a necessary part of a business in transition.