The boss of a major data centre operator is giving up bonuses worth millions amid a botched facility rollout that has cost investors billions.
NextDC chief executive Craig Scroggie has agreed to forgo annual short-term and long-term bonuses valued at up to $7.5 million, while the group’s board directors will now take a pay cut after earlier planning to ask shareholders for a raise.
Company chairman Douglas Flynn has also reaffirmed his intention to retire from the board once a new chairman is in place, and another board member will also step down once a replacement is found.
“The board recognises and shares investors’ disappointment arising from the M3 Melbourne power delay and revised guidance for the financial year,” it told the stock exchange on Monday.
NextDC has withdrawn a resolution to be put to its annual general meeting in November to increase directors’ maximum pay to $2.5 million, from $2.2 million.
Instead, they will wear a “voluntary” 10 per cent fee cut.
Shares in NextDC plunged last week, wiping $3 billion off its market value, after it slashed earnings guidance by $140 million because of delays to expand its M3 data centre in West Footscray.
Following a community backlash, power company Jemena paused the installation of 22-metre concrete power poles needed to supply the mammoth data centre with more electricity to expand its capabilities.
NextDC had already sold that unbuilt capacity and the delay seemed to put it on an uncertain financial footing, with the company declaring it was cutting its capital expenditure program by $750 million and considering selling off future development sites to conserve liquidity.
NextDC shares were changing hands on Monday morning at $5.44, down three per cent, and remain close to their lowest level since 2018.
The stock is also down nearly two-thirds over the past 12 months.
NextDC also said on Monday that it had asked a global board advisory firm to find its new chairman and new independent non-executive director, ideally persons with data centre, energy or infrastructure development experience.
Another board member, international banker Stuart Davis, will stand for re-election at the company’s annual shareholder meeting in Sydney on November 20 but intends to step down once the new directors are in place.
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