Cabcharge chairman Russell Balding attacks shareholders' association spill threat

In an unprecedented move, the ASA has decided it will call for the whole board to stand for re-election if Cabcharge gets a fourth strike against its remuneration report at its November 26 meeting.

The ASA claimed Cabcharge had given no "real details" about short-term bonuses, except that they "will not align with shareholders interest, as it will all be in cash".

It also disagrees with a "hurdle rate" of 9 per cent total shareholder return, leading to 50 per cent of long-term incentives vesting, rising to 100 per cent once 11 per cent TSR is reached.

Other complaints were that the board still lacked independence.

It said Cabcharge was effectively "a one-man board" before founder Reg Kermode died in April, and despite the subsequent splitting of CEO and chairman roles little had changed.

"We have been in a situation that Reg promised us things for many years and it never happened," said the ASA's chairman of NSW monitors Allan Goldin. "Bonuses used to be handed out at random just because Reg wanted to do it.

"Reg dies and everyone says it is going to be a new leaf – what we see is that nothing has really changed."

As well as appointing a new CEO, Andrew Skelton, board member Mr Balding became chairman in May. Two independent directors, Rick Millen and Rod Gilmour, have since been appointed, but Mr Goldin said Mr Gilmour could not be considered independent.

"He was employed by Cabcharge until April, then all of a sudden they say we will put you on the board," Mr Goldin said. "They say that they're going to have a new board, but they aren't."

Mr Gilmour was a corporate affairs consultant to Cabcharge from July 2012 to April 2014, and has held government roles with policy and regulatory oversight of taxis.

Mr Balding countered that the Cabcharge board and management had addressed many of the concerns expressed by shareholders about the previous years' remuneration reports, and he called on other shareholders not to support the ASA's plans.

"The board believes it would not be in shareholders' interest to support the voting intentions of the Australian Shareholders' Association in relation to the company's remuneration report," he said.

Mr Goldin said the ASA almost never voted for a spill of the board because it was too disruptive to the company. After a company received two strikes against its executive pay, he said it hoped this would be enough to prompt change.

"Usually we would never recommend a spill if a strike happens but in this case you don't really have a board and there are two directors who have been there for 18 years," he said.

Once a spill motion is voted down, a company must get two more consecutive votes above 25 per cent against its remuneration report for another spill vote to be triggered.

Mr Goldin said he knew of no other ASX 200 company that had faced the prospect of its board being voted out twice.