Shareholders at State-backed Malin Corp rejected its 2017 remuneration arrangements today, in a sign of investor discontent at a company trading at half its IPO price.
The vote is non-binding but is embarrassing for Malin which has embarked on a review of its remuneration policy.
Shareholder advisors ISS had previously expressed discontent with severance arrangements for executives, as well as share awards which ISS said should be distributed to executives over a longer time period. Former chief executive Kelly Martin exited the business with a €3.2m cash severance.
The State backed the life sciences investor to the tune of €50m at its 2015 IPO via the Ireland Strategic Investment Fund (ISIF).
ISIF has said this was on the basis of “significant commitments” to invest in Ireland, saying Malin had set targets for backing companies with Irish operations.
Since the IPO at €10 a share Malin is now trading around half that level. It has recently excluded its two major Irish investments from its “core” portfolio.
Chief executive Adrian Howd told the company’s AGM yesterday that four investee companies – Poseida, Immunocore, Kymab and Viamet – are the “cornerstone” of its portfolio.
“Our strategy is to focus our resources on these core assets, with the potential to deliver significant value for our shareholders,” Dr Howd said.
That leaves Irish-based Altan and 3D4 Medical outside the company’s core portfolio.
Malin’s interest in those businesses may ultimately be sold as the company has embarked on a strategic review which is set to include the disposal of some non-core assets. Chief financial officer Darragh Lyons said there would be no “fire sales” however.
“If you look at those companies, we see returns there for our shareholders but they’re probably not of the magnitude of the other four,” Dr Howd said when asked about Altan and 3D4 Medical.
Ian Curley, a former senior executive at Ardagh and Smurfit Kappa, has recently joined as chairman as part of a board overhaul. Aside from ISIF, another major shareholder is Woodford Investment Management – run by famous London hedge fund manager Neil Woodford.
Dr Howd told reporters yesterday that the way to restore investor confidence was in “showing people the quality of the assets”. He said any decision to invest further money in its portfolio companies would be done on a case-by-case basis, and that he did not anticipate Malin returning to the market for cash.