UGL has received a first strike against its remuneration report as investors protested a $3 million sign-on bonus to the new head of its DTZ property arm and succession incentives to outgoing chief executive Richard Leupen.
About 24.7 million proxy votes cast at the company's annual meeting in Sydney were against the report from a total of 88.3 million proxy votes, representing a vote of 28 per cent against.
The number of votes cast against UGL's remuneration report is sharply higher than in 2013, when 5.5 million votes were against the report, and in 2012, when 8.6 million were against.
Companies that receive "strikes" of 25 per cent of votes or more against their remuneration reports in two consecutive years must hold a vote asking investors whether they want to spill the board.
The Australian Shareholders' Association recommended investors vote against the report due to concerns over the payment of a $US3 million "sign-on" award to Tod Lickerman, the new chief executive of DTZ, and the large proportion of cash paid in other executives' short-term bonuses.
The ASA has also objected to $1.8 million in "succession incentives" awarded to Mr Leupen in 2009 that have now been granted as he prepares to retire in late November.
"We are very disappointed that last year's remuneration framework was not retained," an ASA spokeswoman said at the AGM. "There are very few aspects of the remuneration report now that actually meet our guidelines."
UGL's outgoing chairman, Trevor Rowe, said the vote on the remuneration report was "disappointing" and noted that Mr Leupen's succession payments were arranged several years ago.
Mr Rowe also argued UGL needed to pay Mr Lickerman a sign-on award to secure someone of his calibre.
"This is a common and standard practice in the United States."
UGL plans to complete the sale of DTZ on November 5.
UGL's new chairman, Kate Spargo, who has replaced Mr Rowe, declined to comment on the company's remuneration structure. But UGL's remuneration committee will now have a new chairman, non-executive director Douglas McTaggart, who replaces Mr Rowe in the role.
