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Worley cops first strike as chairman warns on Dar Group creep

Mr Wood’s fixed pay also increased from $1.6 million to $2.1 million as the company removed a voluntary reduction regime.

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Worley chief financial officer Tom Honan also received a transaction-linked bonus of $200,000 as his short-term cash and other benefits rose to $1.48 million for the year.

The Australian Financial Review reported that the payments to the two executives had provoked criticism including from the Australian Shareholders Association.

“Worley has a track record of being disciplined with executive rewards to ensure the right behaviours are incentivised,” Worley remuneration committee chairman Tom Gorman told the meeting.

“These outcomes have rewarded executives for achieving key business performance outcomes alongside the extraordinary effort required to successfully complete the acquisition of ECR.”

The result could have been worse for Worley with 114 million shares – or about 29 per cent of the vote at the meeting – counted as abstaining. The Financial Review reported that the company’s biggest shareholder Dar abstained from the vote.

These outcomes have rewarded executives for achieving key business performance outcomes.

Worley director Tom Gorman

The strike comes amid an ongoing feud between the two companies, with Worley arguing to the Foreign Investment Review Board that Dar’s bid increased governance control through creeping acquisition, board representation and a business cooperation agreement would be against Australia’s national interest.

“A number of our customers have expressed concerns about increased influence of Dar Group over Worley,” the engineering giant’s chairman John Grill said at the AGM in Sydney on Monday.

“This has the potential to impact the levels of business we do with our customers and in turn the value of the company.”

Worley has listed governments in Australia and the US as among its customers.

Mr Grill said the Worley board had unanimously rejected Dar’s request for a comprehensive global cooperation agreement as not being in the company’s best interest.

He said the company needed to focus on bedding down Jacobs ECR transaction which was finalised in April this year.

“We have just invested $4.55 billion acquiring Jacobs ECR and we feel a tremendous responsibility to deliver the value we promised from that acquisition,” he said.

“Dar Group operates primarily in sectors which are not a strategic focus for Worley. We should not distract our management by pursuing work in non-core markets. We see minimal synergy in a comprehensive global cooperation agreement as proposed by Dar Group and we have previously advised them accordingly.”

He said the board was unanimously opposed to further creeping acquisitions by Dar but was open to considering “appropriate qualified independent candidates proposed by Dar Group for a non-executive director position”.

Mr Wood told shareholders the acquisition would deliver benefits this financial year.

“We expect to deliver the benefits of the acquisition of ECR including the realisation of cost, margin and revenue synergies,” he said.

Worley’s shares dipped by 1.4 per cent to $13.40 at market close.

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