Bionic ear maker Cochlear has reported "minimal" market share loss after last year's recall of its flagship implant, and had stood by its remuneration choices in the face of a shareholder backlash.
Speaking at the company's annual general meeting in Sydney this morning, Cochlear chairman Rick Holliday-Smith said the CI500 series implant, recalled from September last year, will be "introduced back into the market in due course".
Earlier this year, Cochlear reported a 4 per cent fall in revenue to $449 million, and a 68 per cent dive in net profit to $56.8 million, on a recall provision of $101.3 million.
Beyond the cost of the recall, the company's first, Cochlear was hurt by the rise of the Australian dollar. Its profit would have been $23.7 million higher if the previous year's foreign exchange rates had remained in place. Sydney-based Cochlear operates in more than 20 countries.
The Australian Shareholders Association this week said it would vote against the awarding of $1 million in options to chief executive Chris Roberts, arguing his large shareholding in Cochlear should be sufficiently motivating for his performance. Proxy group CGI Glass Lewis has also described the performance hurdles as too low.
Documents lodged this morning with the Australian Securities Exchange showed that a vote on whether to to issue, allocate or transfer securities to Dr Roberts under the company's long-term incentive plan received 67 per cent approval of proxy and direct votes cast, and 32 per cent disapproval. Similarly, the company's remuneration report was rejected by 30 per cent of votes received. Of the 34.89 million votes cast, 23.99 million - or 68.75 per cent - were in favour of the resolution. Votes against totalled 10.56 million, or 30.27 per cent. But Mr Holliday-Smith defended the board's remuneration decisions in the face of the public consternation, saying he was satisfied the board had made decisions that were "commercial and in the interests of employees and shareholders".
Cochlear was also conducting a "detailed" remuneration review, he said.
"For many years we have received strong shareholder support as try to ensure fair and reasonable commercial decisions over a long period of time.
"As such it is disappointing that some shareholders have voted against our remuneration-related decisions as set out in this year's notice of meeting.
"However, the board and I recognise this is a complex field and there are a range of understandable views. We have always been willing to listen and engage with shareholders and be responsive, and that will be the case as we move on from here." He added that the board had decided not to increase their fees for the 2012 and 2013 financial years, and would review fees "in terms of fair market levels in the future".
On global economic conditions, Mr Holliday-Smith said: "The continued uncertainties in Europe during F12 impacted growth in some developed countries, but reimbursement levels in the major countries have been maintained. We observe similar issues in the US. We are watching both regions closely.
"The emerging markets continue growing and are increasingly important. In F12 they accounted for around one-third of CI unit sales. We are excited by the medium-term opportunities in these growing economies as they develop and mature."