Liquefied Natural Gas Limited shareholders have voted against the company’s remuneration report for the second year in a row.

The company (ASX:LNG) received its “second strike” after more than 25 per cent of the votes were cast against its remuneration report at Thursday’s annual general meeting.

Under the “two-strikes” law, if a company receives a no vote of 25 per cent or more against its remuneration report for two consecutive years, shareholders can then vote to call a meeting to potentially spill the board.

But shareholders also voted down the resolution to hold a “spill meeting”.

LNG shares gained almost 10 per cent this morning to trade at an intra-day high of 51c.

Communications spokesman Micah Hirschfield told Stockhead that “the board continuously evaluates every aspect of the company while receiving feedback and maintaining an ongoing dialogue with our shareholders”.

Liquefied Natural Gas Limited (ASX:LNG) shares over the past year.
Liquefied Natural Gas Limited (ASX:LNG) shares over the past year.

LNG said after last year’s first strike that it undertook a “review of measures to address shareholder concerns, but that it made “no fundamental changes to the existing remuneration framework”.

Shareholders had raised concerns over what it pays its CEO relative to peers and the low total shareholder return.

LNG said the board paid no short-term incentives (STI) to the CEO in fiscal 2018.

CEO Greg Vesey’s base annual salary is $US635,000 and he earns STIs if he meets certain targets. The targets for the current financial year are the same as last financial year.

LNG added that it also “materially reduced STI payments” made to other executive key management as well as the remainder of the workforce to reflect LNG’s “inability to deliver the STI corporate metrics”.

Shareholders also had issues with what they claim to be “excessive remuneration” to non-executive directors, which includes the issue of rights.

LNG responded that the non-executive directors (NED) had reduced their cash remuneration for fiscal 2017 and fiscal 2018 by about 28 percent in the aggregate, which reductions also reduced the annual rights grants received.

“The board decided that no further changes were to be made to prospective NED compensation levels,” LNG said in its annual report.

In early October, LNG revealed it had scrapped its plan to move to the US and seek a listing on the Nasdaq or New York Stock Exchange.

LNG has been trying to secure long-term customer contracts for its US-based subsidiary Magnolia LNG, which is developing an 8-million-tonne-per-annum LNG export terminal, in the Port of Lake Charles, Louisiana.

The company says trade issues are making it difficult to secure deals with Chinese customers, but its negotiations with customers in other parts of the world remain strong.

LNG wants to make a final investment decision on the LNG export terminal in the first half of 2019.

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