Regis shareholders ‘strike’ back at board at AGM as profits and shares fall

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Shareholders voted 23.59% against the aged care provider’s remuneration report – which outlines directors’ salaries and bonuses – just short of the 25% that is considered a ‘first strike’.

Under the two strikes rule, a second 25% ‘no’ vote can result in a board spill and force directors to stand for re-election.

Regis shares are currently sitting at 2.410, down from 2.850 at the start of October.

The backlash followed Regis’ senior executives being awarded 72.5% of their incentive target, based on Net Profit After Tax (NPAT), this financial year after the board lowered the target.

Chairman Graham Hodges told the annual general meeting this had reflected the reality of the government funding cuts at the time.

All of the listed aged care operators’ profits have been hit since the Federal Government’s 2016 changes to the Aged Care Funding Instrument (ACFI).

As we covered here, Regis posted a 7% fall in its NPAT to $56.9 million this year.

Retirement village operator Aveo, which was subject to a Four Corners investigation last year, has also continued to slide (see top story).

But Regis CEO Ross Johnston also said they expect the impact of the 2016 funding cuts and changes to ACFI to be “substantially grandfathered” into their portfolio by the end of FY19.