NEXTDC cuts executive pay and fees
The ASX-listed company has retracted a proposed resolution aimed at raising the maximum total annual pay for non-executive directors by A$300,000.
The board plans to manage its renewal process under the current A$2.2 million limit, taking into account any overlap between new and departing directors.
Craig Scroggie, CEO, has agreed to forgo his FY27 short-term and long-term incentive opportunities.
A conflict with local residents over concrete utility poles in Melbourne has caused delays in electricity delivery to NEXTDC’s West Footscray facility, leading the company to revise its financial projections downward.
Board Renewal
Chairman Douglas Flynn stated that the board concurs with shareholders’ perspective on the recent stock performance and updated guidance.
“We recognise and share the disappointment of investors resulting from our revised FY27 guidance and share price performance,” Flynn said.
The board’s actions come in the wake of NEXTDC’s announcement regarding power delays at its M3 Melbourne site and updated financial outlook for the year ending 30 June 2027.
Flynn reiterated his plan to step down from the board once a successor is appointed, following a brief transition period.
New Directors
The global executive search and board advisory firm Spencer Stuart has been tasked with identifying both a new chairperson and an additional independent non-executive director.
The new directors will ideally have data centre, energy, or infrastructure development and/or capital management experience.
Read Also: Asia investors face higher yields with rising risks
Assuming suitable candidates are identified, the board anticipates appointing both individuals during the first quarter of 2027.
Additionally, the board has withdrawn Resolution 7, which had proposed granting Craig Scroggie 145,916 performance rights and 145,914 restricted rights under the FY27 Long Term Incentive Plan.
Financial Guidance
NEXTDC lowered its FY27 net revenue guidance to between AU$475 million and AU$500 million, from AU$615 million to AU$640 million.
Underlying EBITDA guidance was also revised to between AU$245 million and AU$265 million, from AU$385 million to AU$410 million.
The company has AU$8.675 billion of liquidity as of 30 September and remains in compliance with its financial covenants.
It has paused new development projects and land acquisitions, and will announce the outcome of a review of its capital expenditure program at its annual general meeting.
The revised figures exclude the affected M3 customer contracts, which contributed approximately AU$140 million each of net revenue and underlying EBITDA to the previous guidance, highlighting the significant impact of the delay on the company’s financial performance.
The search for new directors, led by Spencer Stuart, is ongoing, and the board expects to appoint the new chair and independent non-executive director in the first calendar quarter of 2027.
Craig Scroggie and the management team are working to resolve the issues with the M3 Melbourne facility and to improve the company’s overall performance.
Director Stuart Davis remains up for re-election under Resolution 2, and the board continues to recommend that shareholders vote in favour of his re-election to support a smooth transition, while he intends to stand down once the search for new directors is complete and the new directors are in place.
