Shareholder Backlash Hits CSL Amid Slumping Stock
The Australian biotech giant CSL Limited (ASX: CSL) has been hit with a second strike from shareholders over its executive compensation plans, triggering widespread scrutiny of corporate governance at one of Australia’s largest listed companies.
At the annual general meeting in Melbourne, more than 40% of shareholders voted against CSL’s executive pay report, far exceeding the 25% threshold that constitutes a formal strike under Australian corporate law. However, despite this backlash, investors ultimately voted to keep the current board, averting a spill motion that could have forced directors to stand for re-election.
CSL Share Price Plummets on US Vaccine Outlook
The CSL share price dropped sharply following the meeting, falling by 15% on Tuesday, bringing its total decline for 2025 to over 35%. The selloff was exacerbated by concerns about a forecast decline in US influenza vaccination rates, which CSL says will drop 12% overall and 14% among people over 65, compared to pre-pandemic levels.
Analysts warn that this slump in vaccination demand could hurt the company’s Seqirus division, which produces flu vaccines — a key profit driver for CSL.
CSL’s “Second Strike” and Executive Pay Controversy
Under Australia’s two-strikes rule, introduced in 2011, any company receiving two consecutive shareholder “strikes” on remuneration reports faces a potential board spill vote. The latest strike was the second in as many years for CSL, signaling ongoing investor frustration over pay packages that many feel are disconnected from the company’s performance.
Despite the revolt, shareholders voted to keep the current board intact. CSL chair Brian McNamee acknowledged the dissent but said he was “pleased to have passed that hurdle.”
High Pay Amid Weak Performance
CSL’s CEO Paul McKenzie earned US$6.06 million (A$9.2 million) in the last fiscal year, while former CEO Paul Perreault previously received more than US$45 million in a single year through incentive schemes.
Critics argue that these pay levels are excessive, especially given that CSL’s share price has fallen more than a third in 2025. Earlier this month, Guardian Australia reported that CSL and other major Australian firms had spent more on executive bonuses than they paid in company tax, intensifying shareholder discontent.
Legacy of the Vifor Acquisition
Another source of tension stems from CSL’s 2022 acquisition of Swiss company Vifor Pharma, which many investors considered overpriced. The move was intended to expand CSL’s footprint in the iron deficiency treatment market but has yet to deliver the expected financial benefits.
Combined with weaker demand for vaccines, this has fueled investor skepticism about management’s strategic decisions.
Outlook for CSL and ASX Investors
Despite the turmoil, analysts remain cautiously optimistic about CSL’s long-term fundamentals, citing its diverse portfolio in plasma therapies, vaccines, and specialty medicines. However, in the short term, the CSL share price (ASX: CSL) may continue to face pressure as investors digest the company’s weaker earnings outlook and leadership challenges.
McNamee emphasized that CSL remains committed to “global competitiveness” and attracting top executive talent, noting that the biotech industry requires “world-class leadership and innovation.”
Conclusion
The CSL shareholder revolt underscores a growing trend among ASX-listed companies where investors are pushing back against executive pay perceived as excessive amid falling share prices. While the CSL board has survived for now, the message from investors is clear: performance must match pay.
How CSL navigates its next fiscal year — and whether it can regain market confidence — will determine if this marks a temporary setback or a deeper governance reckoning.
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