Gold Miner Faces Shareholder Backlash Over Executive Payments
Australian gold producer Vault Minerals has been dealt a significant blow from its shareholders, who have overwhelmingly rejected the company's executive remuneration report in a dramatic show of discontent. The mining company received what's known as a first strike during its annual general meeting held last Friday, with approximately 52% of investor votes cast against the adoption of the pay package.
This substantial protest vote easily surpassed the 25% threshold required under the Corporations Act to register official disapproval of the company's compensation practices. The rebellion was largely driven by controversial payments to departing chief executive Luke Tonkin and former chief operating officer Richard Hay.
Proxy Advisor Sounds Alarm on Tonkin Bonuses
Influential proxy advisory firm Institutional Shareholder Services played a pivotal role in the shareholder revolt, recommending its clients vote against the remuneration report. ISS took particular issue with Luke Tonkin receiving 5.1 million long-term performance rights, valued at more than $1.7 million when granted last year.
The controversy stems from the fact that these performance rights will convert into shares provided Tonkin remains employed until February 1, 2026. This arrangement has raised eyebrows given that Tonkin announced in August his intention to step down as CEO within the next twelve months, though no specific departure date has been confirmed.
ISS strongly criticised this arrangement, stating that full vesting of awards upon cessation of employment is problematic and inconsistent with Australian market standards. The firm noted that local norms typically support forfeiture of unvested awards or at least pro-rata vesting based on performance and time served.
Adding to shareholder concerns, ISS revealed that Tonkin's total remuneration for 2025 reached $3.4 million, significantly above the peer company median CEO pay of $2.5 million.
Golden Handshake Adds Fuel to Fire
The shareholder discontent extended beyond Tonkin's package to include a substantial termination payout to former chief operating officer Richard Hay. ISS expressed concerns about Hay receiving a termination benefit of $517,768 after he finished in his role on November 26 last year.
These termination benefits included cash in lieu of both contractual notice period and retention rights to which Hay was contractually entitled but not issued before his departure. While ISS acknowledged the overall amount wasn't excessive, it noted shareholders might question why his retention rights were paid in full.
The timing of Hay's retention award raised additional questions, as it was granted on November 22, 2024 - just days before he ceased to be a key management person. Hay was among four executives who received a one-off retention incentive worth at least $183,000 when Red 5 and Silver Lake Resources merged in June last year to create Vault Minerals.
What Comes Next for Vault Minerals
The first strike places Vault Minerals on notice that shareholders are dissatisfied with current executive compensation practices. Should the company receive another strike against its remuneration report next year, shareholders would be required to immediately vote on whether to hold a meeting to spill the board.
This development comes despite Vault Minerals enjoying strong share price performance in 2025, with shares rising approximately 128% amid the ongoing gold price boom. The company's market capitalisation surpassed $5 billion last month, highlighting the disconnect between financial performance and shareholder approval of executive pay practices.
While board spill meetings are rarely supported by shareholders even when companies accumulate multiple pay strikes, the first strike serves as a clear warning to the Vault Minerals board that compensation arrangements need review. The company now faces increased scrutiny as it balances rewarding executive performance with maintaining shareholder confidence in its governance practices.
