A2 Milk shareholders have voted by an overwhelming 95.7 per cent in favour of chief executive Jayne Hrdlicka retaining her dual role of boss as well as board director.
This was despite a call from the Shareholders Association to oppose her appointment as managing director, on the grounds “there should be a clear separation of the governance and management roles and to avoid the conflicts of interest that will arise from a dual role”.
It said the chief executive should report to the board and not be a “first among equals”.
However, shareholders were less enthusiastic about a resolution that the pool for directors’ fees be lifted by $415,000 from $950,000 to $1,365,000. This was passed by 67.4 per cent, which Association chairman Michael Midgley said was “a clear message”.
Chairman David Hearn’s fee rises by 37.5 per cent to $165,000, as will the three independent non-executive directors, who will be paid a similar amount.
Deputy chairwoman Julia Hoare will receive $210,000, up 27.3 per cent. Her fee is higher than Hearn’s because he has an executive role in relation to the company in Europe and the United Kingdom, and she sits on more committees than he does.
Prior to Tuesday’s annual meeting, Hrdlicka said A2 would rise above the increasingly shaky world trading environment thanks to demand from Chinese consumers and its positive relationship with government.
China accounts for a quarter of A2’s business and has helped propel the marketing company to record revenue of $368.4 million for the first quarter of 2018-19, up 40.5 per cent on the same period last year.
“We have had no issues with respect to trade wars and dynamics at any level, because I think we just focus on building our brand for the long term,” she said.
Besides shipping product itself, A2 also relies on a second sales channel called “daigou” – shoppers living outside China who send products directly to Chinese consumers. From January the daigous will have to register as import retailers and pay tax.
Hrdlicka dismissed criticism by the US dairy industry of A2’s advertising and marketing claims, that A2 products are easier on digestion than conventional A1 protein milk and may help avoid stomach discomfort.
While most cows carry both A1 and A2 proteins, A2 milk comes from herds that that produce milk naturally free of the A1 protein.
Production of A1 or A2 type milk depends on a cow’s genetics. Some researchers have claimed A2 may be healthier for people who are susceptible to diabetes, heart disease, autism, schizophrenia and Crohn’s disease.
“The traditional dairy producers are nervous – so they’re going to fight dirty,” Hrdlicka said.
Source: Stuff
