ICON INVESTORS FORCED TO VOTE ON 'GOLDEN HANDSHAKE'
Written on the 17 July 2015 by Nick Nichols
ICON Energy (ASX:ICN) has been forced to call a shareholder meeting to vote on whether it should pay the company's former company secretary more money on top of his termination settlement.
The move comes as Ross Mallett, who was also Icon Energy's legal counsel, threatened to sue the Gold Coast-based gas explorer for what he is claiming are unpaid entitlements under the terms of his original contract.
Mallett's position as legal counsel at the company was abolished in May due to a restructuring at the executive level by Icon aimed at reducing costs. He had been with the company for three years.
Icon is understood to have paid Mallett a severance package, details of which have not been disclosed. It is not clear how much more he is seeking from Icon.
Under corporate law, severance pay can total up to one year's salary based on an average pay rate calculated over the preceding three years. A company cannot pay more than this without shareholder approval.
Company records show that Mallett had a base salary of about $294,000 in the 2014 financial year.
Icon Energy managing director Ray James says he cannot comment on the matter beyond what has been included in a statement released to the ASX this morning.
"Under the Corporations Act, the company must seek approval from shareholders for the payment of any termination benefits which are claimed over and above those payments already made to Mr Mallett in accordance with the relevant section of the Act," says the company in the statement to the ASX.
"Mr Mallett has, on two occasions, asserted that he will sue the company for breach of contract for those contractual entitlements, the quantum of which exceeds the limit set under the Corporations Act."
Icon has called for the meeting to be held at its Broadbeach Waters headquarters on August 17.
It is understood Mallet could still sue Icon should shareholders vote against further payment to him, although he will be up against changes brought to the Corporations Act in 2010 by former Prime Minister Julia Gillard.
The changes were aimed at shaking up the golden handshake previously offered to key company executives who were vacating their roles.
Author: Nick Nichols