Lowy says pay backlash a “misunderstanding”

westfieldWestfield’s billionaire chairman, Frank Lowy, has blamed shareholder misunderstanding for a backlash against executive salaries at his Australian shopping centre group.

Scentre avoided a first strike against its remuneration report but there was a sizeable 13.65 per cent vote against it.

A listed company has to put forward a spill motion of board positions if 25 per cent of shareholders vote against executive salaries for two years in a row.

Lowy said confusion about the creation of Scentre in June 2014 had possibly sparked a sizeable no vote.

“Maybe there’s some misunderstanding about (what) some of the executives got paid, which was adjusted at separation between Westfield Corporation and Scentre Group,” he told reporters after Scentre’s inaugural annual general meeting in Sydney.

“I think it’s one or two shareholders who constituted the vote against.”

CEO, Peter Allen, was paid $10.2 million during 2013/14, before Westfield’s Australian and New Zealand assets were hived off into a new company, Scentre.

Allen had been paid almost $6 million in 2012/13, when he had been the old Westfield Group’s CFOr, Scentre’s annual report showed.

Lowy also insisted he would remain focused on Australia, even though Westfield Corporation oversees 44 shopping malls in the US and the UK.

“I have no plans to move out of Australia,” he said.

“I’m the chairman of Scentre Group … and I’m totally devoted to its success.”

Earlier, he told shareholders a 30 per cent jump in the Australian population, from 23 million to 30 million, would be beneficial.

“These people will be shoppers, and they will be shopping at Westfield shopping centres,” he said.

Scentre enjoyed a strong March quarter, with comparable specialty store sales up 5.8 per cent from the previous period.

It is also forecasting growth in its funds from operations of 3.5 per cent and a dividend increase to 20.9 cents a share for the year, after paying 10.2 cents for the second half of last year.

Scentre shares were 5.5 cents, or 1.5 per cent weaker, at $3.705 by 1358 AEST.




  1. Philip Endersbee posted on May 8, 2015

    Dear Frank, I have to assume the article in Inside Retail is correct. No-one says you cannot privatize and pay your staff whatever you like but if you want to have shareholders then you have to be prepared to tolerate how they feel and listen to what they have to say. If you think paying your execs 10 times more than what we pay someone to run the country is what the broader business community sees as appropriate then fine but I have to say one of us has it wrong. Cheers, Phil

  2. Brett Stevenson posted on May 8, 2015

    It's a good point Phil. Sometime the actual quantum of the remuneration paid to executives needs to be seen in perspective. Comparing to the PM's salary is a good place to start. Next compare to nurses or teachers salaries to see just how far removed they are from reality. Some of these executives are lottery winners every year. And that's not a compliment on their luck more a statement on the avarice among this executive club!! Mr Lowy may be a successful businessperson but that is at quite a cost to some very hardworking retailers who lease in his shopping centres, and at quite a reward to his pampered executives. No pat on the back from me but I hardly think that concerns Mr Lowy!!

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