It came weeks after Xero backed itself to crack the North American market with an almost $4 billion buy of payments startup Melio, and arguably at a time when shareholder confidence was essential.
Against this backdrop, Xero was paying US$15.2m ($26.1m) to chief executive Sukhinder Singh Cassidy.
It also paid a US$14.4m sign-on bonus to US-based chief financial officer Claire Bramley, who joined in February.
According to Australian media, under standard Australian Securities Exchange rules, the vote would count as a formal strike against Xero’s board.
Those rules held that a vote of 25% against a resolution was counted as a so-called “first strike”.
A second such vote would mean the board could be tossed out in a re-election.
However, Xero being a New Zealand-domiciled company meant that it was not governed by the “two-strike” rule, meaning the ballot was more theoretical than it was a reality.
Even if the ballot was symbolic, investors had registered the depth of their discontent.
Xero’s chair, David Thodey, at one time CEO of Australian telco Telstra, said the company needed to pay more than Australian salaries to lure top talent over those packages on offer from higher-paying US companies.
Three ‘jobs’ in one package
Meanwhile, Cassidy viewed the acquisition of the previously unprofitable Melio deal as a critical value to Xero’s nascent North American offering, enabling it to scale.
Cassidy was referring to Xero’s 3x3 strategy, which was to combine three “jobs” – accounting, payroll and payments – into a single package and win market share in Australia, the UK and North America.
Xero has made good progress in Australia and the UK, but the much larger promise of the North American market has so far proved elusive.
Other resolutions, including the re-election of directors Brian McAndrews, Susan Peterson and Thodey, achieved almost unanimous shareholder support.
