(Updates with a comment from Woodside Energy in the fifth and sixth paragraphs.)
Woodside Energy Group's (ASX:WDS) continued focus on expanding its oil and gas portfolio is worrying as it entails transition risk that is not adequately mitigated by the company's long-term strategy, Health Employees Superannuation Trust Australia (HESTA) said Thursday.
The superannuation fund, which is a shareholder of Woodside, issued the statement following the company's annual general meeting, noting that it voted against both the remuneration report and the granting of share acquisition rights to the CEO.
"In our assessment the remuneration package constructed for incoming CEO Liz Westcott is not adequately justified," HESTA said. "The rise in total incentive opportunity appears excessive for an incoming CEO and out of step with its [Australian Securities Exchange] peers."
The superannuation fund acknowledged Woodside's progress on climate disclosure and a reduced dependence on carbon credits, but also pointed to an opportunity "for the board to provide greater challenge to the assumptions underlying the oil and gas-focused strategy."
In a statement to, a Woodside Energy spokesperson said the company's board "strongly disagreed with recommendations against the CEO's remuneration and we welcome today's positive vote."
The CEO's total target reward is above the ASX20 median but lower than the international oil and gas peer median, reflecting her more than 30 years of experience in the global energy sector, the spokesperson said.
The company's shares gained nearly 3% on market close.