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Nine comes close to first strike at AGM

AAP logoAAP 15/11/2016 Prashant Mehra

Nine Entertainment has come close to a first strike against its remuneration report as shareholders railed against the high pay awarded to executive and non-executive directors despite the broadcaster's disappointing performance.

More than 21 per cent of votes went against Nine's remuneration report at the company's annual general meeting on Tuesday.

More than 19 per cent also opposed the resolution on performance rights to chief executive Hugh Marks, who was paid more than $1.38 million in the last financial year amid disappointing ratings and falling revenue.

Shareholder votes on the remuneration report are non-binding, but more than 25 per cent voting against its executive pay levels counts as a 'strike'.

Two strikes - two consecutive years where more than a quarter of votes go against the report - can trigger a vote for a spill of a company's board.

"Shareholders have suffered, the share price has halved, and it would be appropriate if you and the directors share a little bit of that pain and took some reduction in your fees," Australian Shareholder Association's Alan Golding told chairman Peter Costello at the meeting in Sydney.

Mr Costello is paid $425,000 as annual fees, while other non-executive directors are paid $180,000 a year..

In a sometimes heated meeting, shareholders vented frustration at the high levels of fees paid to non-executive directors, as well incentives paid to executives, given that the share price and market value of the company has more than halved since 2013.

Shareholders also asked the directors to accept part of their fees in the form of company shares.

Nine shares closed up 2.5 cents, or 2.72 per cent, at 94.5 cents but are still way down on their peak of $2.39 in 2013.

Mr Costello said the strong vote against the resolution had been backed by a major shareholder, who he declined to name.

He said the board would review the structure of remuneration for executives and fees paid to directors.

Recent media reports have said Bruce Gordon, the billionaire owner of regional broadcaster WIN, was likely to vote against the resolutions after Nine earlier this year ditched a long standing deal with WIN and signed a five-year affiliation agreement with Southern Cross.

Mr Marks forecast continuing pressure in the advertising market, with Nine's metro free-to-air advertising revenue expected to suffer a low single-digit fall in 2017.

He said there had been a four per cent decline in advertising revenue in the first quarter of the fiscal year.

"While there is some forward positive commentary about the market, we don't expect that to translate to outcomes until calendar year 2017, with this being assisted by implementation of new trading systems by Nine and across the industry," he told shareholders.

The company, however, also expects FY17 television costs to be 1.5 per cent lower than the previous year, with an additional $50 million cost reduction planned by the 2019 financial year, he said.

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