Under-pressure power producer and retailer AGL Energy will face renewed questioning from shareholders over the future of its Liddell power station in NSW at its annual general meeting on Wednesday.
Australia’s second-largest energy retailer has faced demands in recent weeks from Prime Minister Malcolm Turnbull and Energy Minister Josh Frydenberg to keep Liddell operating beyond its scheduled shutdown in 2022
With rising energy prices high on the agenda, the federal government is trying to delay the closure of the coal-fired power plant for at least five years in order to stave off a likely shortfall in generation.
However AGL boss Andrew Vesey has remained firm that he is not interested in extending Liddell’s life or selling it, citing the high costs of maintaining the ageing plant as well as AGL’s plan to exit coal-fired power by 2050.
Incoming AGL chairman Graeme Hunt, a former CEO at Transurban and Lihir Gold, is expected to underline that approach at the company’s annual general meeting in Melbourne.
Earlier this month, Mr Vesey made a small concession to Canberra by agreeing, at Mr Turnbull’s request, to take to his board a proposal to keep Liddell open until 2027 or sell it to another party.
He also agreed to work out a plan within 90 days to ensure sufficient extra renewable power supply to make up for the loss of Liddell’s generation and investors will be hoping for details at the AGM.
AGL’s company’s board will also be anxious as a potential second “strike” over executive pay looms.
AGL shareholders delivered a first “strike” at last year’s AGM, with more than a third of shareholders voting against the company’s remuneration report that included the use of non-financial targets and underlying earnings to calculate chief executive Andy Vesey’s $6.94 million pay packet.
AGL’s board has agreed to cap the CEO’s salary at nearly the same level for the 2018 financial year, but still risks a vote for a board spill if more than a quarter of votes go against the report.
Proxy advisors ISS and CGI Glass Lewis have expressed concern over the pay level but recommended voting in favour of the remuneration report.
However, the Australian Shareholders Association says the remuneration remains excessive and will vote against the report.