Mining company Oxiana Ltd has been a great success story over the past decade as founder Owen Hegarty built it from nothing to a market capitalisation exceeding $7 billion at its peak in late 2007.

However, what should have been a huge send-off for Hegarty at Friday’s EGM after the Zinifex merger will instead see the former Rio Tinto executive be remembered for creating history in being the first Australian CEO to have a golden goodbye voted down by shareholders.

Despite a majority of small shareholders voting in favour, the institutions did not succumb to Oxiana’s ring around and the final proxies saw just 575 million votes in favour and 776 million against, meaning 57.4% of the proxies agreed with the argument that Hegarty’s golden goodbye was over the top.

Oxiana chairman Barry Cusack played a very cynical game in the way this was handled. At 2.29pm, just as the EGM was starting, Oxiana released these 33 pages to the ASX and the very last page revealed the proxy position on Hegarty’s payout. However, the statement said nothing about the withdrawal of the resolution.

Whilst Cusack performed something of a mea culpa mid-meeting about not giving Oxiana shareholders a chance to vote on the $6.3 billion Zinifex merger, there was no mention of the coming bombshell on Hegarty’s payout.

This meant that over the first 90 minutes of the EGM we changed Oxiana’s name to OZ Minerals, appointed the five Zinifex directors to the board, re-appointed Hegarty to the board, lifted the maximum board fees from $1.5 million to $2.7 million and then finally got ready for the debate about the payout.

Cusack then thanked Hegarty profusely, encouraged a large round of applause for the man, declared the proxy position, withdrew the resolution and immediately closed the meeting. Have a listen here.

This means that Oxiana shareholders have created history with this revolt but the payout has never once been discussed at the three shareholders meetings since the merger was announced in February.

I asked Cusack at the Oxiana AGM in April whether Hegarty was getting a big payout and he said all had been explained in the annual report and there was no big payment. Have a listen to that exchange here.

Zinifex shareholders then voted in favour of the deal in June and the details of the payout were cynically released a few hours after that meeting in the notice of meeting for Friday’s EGM

The key question that still hasn’t been answered in why on earth Hegarty should be given $5.4 million in cash to surrender 6 million Oxiana options that had a strike price of $4.36 and were massively out of the money with the stock now down below $2.

Most shareholders would have no problems with paying out Hegarty’s contract for his base salary but this was just over the top.

This video savaging Oxiana chairman Barry Cusack Owen Hegarty will be up by 2pm today