Shareholders have delivered a warning to Cann Global management over executive pay packages after almost a third of the share register voted to reject the company’s remuneration report.

While the resolution to adopt the report was formally carried at its annual general meeting, the size of the revolt – 32% – handed Cann Global a first strike under the Corporations Act 2001, comfortably above the 25% threshold needed to do so.

Strike: shareholder unrest over internal structures was behind the remuneration revolt

Under the two-strike rule, a similar outcome next year could trigger a spill, leaving the company’s board facing re-election.

Investor protest, which extended to several other resolutions, followed anger late last year over commercial relationships with entities relating to Cann Global’s founder and former chairman Pnina Feldman.

Unrest centred on a multimillion dollar arrangement with Australian Gemstone Mining – a private firm owned by Feldman – that had provided a range of services for Cann Global since 2007.

The agreement, which was terminated when Feldman stepped down last August, saw Cann pay Australian Gemstone Mining A$14m over 14 years for management, secretariat and other services.

At the AGM, an award of shares to Feldman as a settlement of Cann’s contractual obligations with Australian Gemstone Mining was carried despite 39% of votes objecting to the deal.

Another arrangement said to concern shareholders – now terminated – saw a close relative of Feldman provide marketing services to Cann Global in exchange for payments to Sydney’s Yeshiva Centre.

A failure to recover $1.2m from Volcan Australia Corporation, an entity owned by Feldman and her son, Sholom Feldman – who is MD of Cann Global – also created unease.

Cann Global said it was “naturally disappointed” at receiving a strike but acknowledged that “certain internal structures… concerned some shareholders”.

All salaries will now be paid directly to employees, the firm said.

Cann Global MD Sholom Feldman

Cann Global managing director Sholom Feldman said in a statement to Cannabiz: “We have already made the necessary steps to align our operating practices with other listed companies and are committed to minimising future related-party transactions.

“As our chair reiterated at our AGM, we are focused on continuing to enhance governance and improve transparency for the benefit of our shareholders.”

He added: “Cann Global has launched a number of new products and initiatives over the last 12 months, undertaken an operational review of our food division to ensure greater profitability and set up a strong foundation for revenue growth in CY22

“We are confident that the team’s hard work will deliver results this year and we hope this will be duly recognised by the market in share price growth.”

Among the new products launched by Cann Global is a plant-based skincare range called Fusspot. A marketing campaign is due to start this quarter.

The range will complement its three Canntab medicinal cannabis hard-pill products, Instacann.

Steve has reported for a number of consumer and B2B titles over a journalism career spanning more than three decades. He is a regulator contributor to health journal, The Medical Republic, writing on...