This article is from the Australian Property Journal archive
SHAREHOLDERS of Goodman Group have slapped the industrial property giant with a first strike against its remuneration report at yesterday’s annual general meeting, unhappy about the passage of $500 million in share options to employees.
Goodman Group has a market cap of $70 billion and has been one of the star performers on the ASX in recent years, riding the wave of the e-commerce boom and demand for logistics facilities that spiked during the pandemic, and is currently reorienting its development workbook toward the surging data centres sub-sector amid skyrocketing use of AI and cloud storage.
Goodman last week reaffirmed its FY25 operating earnings per security growth forecast of 9%, equating to an operating profit topping $2.2 billion.Led by proxy advisers Ownership Matters and ISS, shareholders yesterday voted 34.89% against its remuneration report, clearing the 25% threshold that constitutes a strike. A second strike next year would see shareholders then vote on spilling the board, forcing all directors to seek re-election.
The proxy advisers had encouraged institutional investors to vote against the report on the grounds that Goodman excludes the $501.4 million in employee share options – which apply to every employee at the company – when calculating its FY24 operating profit.
In their Goodman voting recommendation report, they suggested that the growth hurdles had been set at lower levels compared to reported achievements, and may be “insufficiently challenging”.
Investors also voted nearly 37% against long-term incentive awards to chief executive Greg Goodman, on the advice that the remuneration is outsized given the group’s Australian market capitalisation, and compared to other listed peers..
This isn’t uncharted territory for Goodman Group. Shareholders hit the company with a second strike in 2022, but all but unanimously voted against the subsequent spill resolution.
Goodman’s share price closed or 56c higher yesterday, up 1.53%, at $37.09.
Data centre demand to double
In his address to the AGM, Goodman said data centre demand has “continued unabated”, with expectations for the sub-sector to double to a $40 billion investable universe over the next four years.
“The group is well positioned to deliver against this demand,” Goodman said.
“We’ve expanded our global power bank to five gigawatts, and we’re also evolving our delivery capabilities to offer a range of options. These include powered sites, powered shell and core, fully-fitted operational solutions, reducing time-to-market for customers. The fully fitted operational option would see Goodman provide and maintain the infrastructure required for customers to operate. This is being driven by both customer and investor demand for operational assets.”
Goodman’s assets in the data centre sector now representing 42% of its work in progress.
“Our competitive advantage is that we have the sites, power, capability, people, track record, and commitment to build the infrastructure to accelerate time to market. We believe this will generate significant long-term value,” Goodman said.
