Investor backlash over executive pay at Kyle & Jackie O’s former network
Updated ,first published
Shareholders in Kyle Sandilands and Jackie “O” Henderson’s former radio network have rebelled over the company’s executive pay packages, amid a collapse in share prices and investor anger over the network’s public falling out with two former stars.
ARN shareholders overwhelmingly voted against the company’s pay report, including a flat $1.1 million salary for CEO Michael Stephenson, with more than 90 percent of proxy votes opposing the pay report.
The reaction comes as ARN chairman Hamish McLennan vowed to continue fighting Sandilands and Henderson’s $170 million combined lawsuits and told shareholders at the company’s annual meeting in North Sydney on Thursday that he had personally invested $500,000 in ARN as a sign of confidence.
Stephenson told the meeting that ARN lost $26 million in advertising revenue last year from customers spending due to “brand safety” concerns. Kyle and Jackie O’s Show.
“Over time, I expect a significant percentage of the $26 million in revenue lost for the year due to brand safety concerns to return,” Stephenson said.
Despite investors’ anger, McLennan received investors’ support and was re-elected with 80 percent of the vote.
Ahead of the meeting, McLennan faced calls from investors to resign after handing over $200 million worth of combined contracts to Sandilands and Henderson and presiding over an 87 per cent drop in ARN’s valuation.
The chief executive, chairman and board of ARN Media, which owns the KIIS network, were facing angry investors and the media for the first time since sacking the program presenters two months ago.
The company has faced intense media scrutiny and legal action after giving Sandilands and Henderson the most expensive talent deals in Australian media history and ripping them up just over a year later.
“If I had been pregnant, I would have seen the writing on the wall,” a major shareholder told this masthead last month, noting a series of poor strategic decisions including the $307 million acquisition of regional broadcaster Grant Broadcasters just five years ago; this figure dwarfs the current value of the entire company by several orders of magnitude.
At the meeting, veteran investor David Kingston asked McLennan a series of hostile questions; including describing “the three biggest mistakes you and the board made that contributed to massive shareholder losses.”
McLennan described the question as “loaded” and said the entire traditional media industry was under pressure. McLennan said the company regularly reflected on its performance, but he was committed to the ARN.
“We are not happy with where we are right now,” McLennan said. “I think it’s a great thing to look back on when you look at a number of different decisions, but it’s a very, very volatile environment and I think the board stands by all the decisions they’ve made.”
He defended the Grant acquisition by saying it added to earnings. “This has been a great acquisition for us,” McLennan said after saying he was “shocked” by Kingston’s defense of the purchase.
McLennan, who despite being chairman of the company has faced some scrutiny for his relatively small stake in the company, told investors at the AGM that he would invest $500,000 in ARN.
“I will make this investment in my personal capacity as a demonstration of my confidence in the company’s strategy,” he said. Two days ago, this imprint reported that McLennan had sold his Sydney home for $36 million.
During his speech McLennan reinforced ARN’s view that Henderson had told the company he could no longer work with Sandilands and therefore abandoned the delivery contract. Kyle and Jackie O’s Show.
He told the ARN: “Direct contact with Mr Sandilands [was] It is no longer tenable.”
McLennan said he was confident in ARN’s litigation strategy. “I would like to reassure shareholders that the board is committed to defending these claims and actively pursuing cross-claims,” he said.
While two major proxy advisory firms backed McLennan’s re-election, CGI Glass Lewis argued that Stephenson’s fixed $1.1 million contract was too much, citing the fact that it was well above the average $812,000 paid to senior executives of ASX250-300 companies and that ARN was not even on that list.
“This approach is notable in the context of the Company’s declining market capitalization, which fell from approximately $578 million at the end of Fiscal Year 2021 to approximately $300 million over the next two years, to $124 million at the end of Fiscal Year 2025, and to approximately $74 million as of April 17, 2026,” the report said.
The ARN defended Stephenson’s pay packet based on his responsibilities and ability.
The AGM will be the first meeting for Stephenson, who joined ARN initially as chief operating officer. He previously served as sales manager at Nine (which owns this imprint) for ten years.
This week Sandilands and Henderson entered their defense in a counter-claim brought against the pair by the ARN. Sandilands’ legal team claims KIIS FM and ARN cashed in on her and Henderson’s on-air feuds, even going out of their way to promote them as a feature of the show’s daily soap opera drama.
“[ARN] “This behavior was publicly exploited and thereby attempted to monetize it,” Sandilands’ lawyers said in the documents.
“[They did this] “Without instructing or requesting Mr Sandilands or Ms Henderson not to engage in such conduct.”
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Calum Jaspan is a media writer for The Sydney Morning Herald and The Age, based in Melbourne. Reach him securely on Signal @calumjaspan.10Connect with: X or email.
