Xero (ASX:XRO) shareholders overwhelmingly voted against the adoption of the company's remuneration report at its 2026 annual meeting on Thursday, delivering a "second strike" against executive compensation, according to a same-day filing with the Australian bourse.

The company said roughly 29.5% of votes were cast in favor of the remuneration report, while 70.5% were against it.

Under Australian corporate law, a "second strike" occurs when 25% or more of shareholder votes are against the executive remuneration report at two consecutive annual general meetings.

However, New Zealand-headquartered Xero added that the resolution is advisory in nature and does not bind the company or its board, nor does it have any other legal ramifications.

Xero recently moved CEO Sukhinder Singh Cassidy's total target remuneration to the 50th percentile of the US peer group from the 25th percentile following a compensation review. It also reviewed the remuneration of CFO Claire Bramley, resulting in the executive's total target remuneration increasing to the market median.

The company's shares fell 2% in recent Thursday trade.