Oil and gas producer Santos executives have narrowly avoided a first strike by investors protesting against their salaries as its shares and the oil price fall.
A vote on the company's remuneration report at its annual general meeting resulted in 23.5 per cent of shareholders rejecting it.
A vote of more than 25 per cent for two years in a row - or two strikes - gives shareholders the power to spill the entire board.
A protest vote had been expected but not such a large one.
It occurred despite the major oil and gas producer recently freezing executive and directors pay at last year's levels and reducing short-term bonuses.
Unusually, it also came despite the Australian Shareholders Association - which often opposes remuneration reports that are easily voted in - supporting it.
Returning chairman Peter Coates said the vote was disappointing, noting the board had received a message that it needed to review its remuneration structure, including short term incentives.
"I wasn't all that happy with the vote ... yes, it is embarrassing," he told reporters after the AGM.
Outgoing chairman Ken Borda, who handed over the reins during the meeting, had earlier defended Santos' performance and substantial operating achievements, which were balanced against the fall in the oil price.
Chief executive David Knox received $3.4 million in 2014, which Mr Borda said was half of what he could have received.
Oil prices plunged to six-year lows this year and forced Santos into taking $1.6 billion in impairments and posting a $935 million annual loss in February.
It has been a painful times for shareholders, with its stock down 45 per cent since last August to $8.32 currently.
Mr Coates told the meeting a cultural change was needed at Santos to make it competitive at any oil price and ensure the share price reflected the company's value.
That had included a $1.5 billion cut in capital investment this year and major job losses, with more to come and the company unwilling to give a figure.
Mr Knox gave an upbeat outlook for energy prices due to Asian demand and growth in the global population of 1.3 billion people by 2030.
The company would be free cashflow positive at a $US60 a barrel oil price in the final quarter of this year and all of next year.
That was linked to the start of exports from its $US18.5 billion Gladstone LNG project, which he said would be its major focus through to 2016-17 before any other new major moves were looked at.
The company faced protests from opponents of its plans for a $2 billion project around Gunnedah and Narrabri in NSW involving controversial coal seam gas drilling.
Mr Knox said he was confident that project would go ahead, pending approval, and that the NSW government was aware of its importance for supplying growing east coast demand.
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