The mini-AGM season continues. Next week ASA representatives will attend the Atlas Arteria, GPT, and Ampol AGMs. And corporate actions continue, with ASA attending the TabCorp demerger meeting next week.
We also expect the AGL demerger documents to be released any day now, which will allow us to weigh up the company documentation with the counter-arguments from others, including new major shareholder Mike Cannon-Brookes and ask any questions the shareholders need answered.
Atlas Arteria (ALX)
We will support the company’s resolutions except for the re-election of Jeffrey Conyers as a non-executive director (NED) of Atlas Arteria International Limited where we will vote against due to the extended tenure after being a Bermuda-based NED of ALX and its Macquarie Bank controlled predecessors for about the past 20 years. The ASA accepted the argument that he remained on the board for continuity purposes when MQA devolved into ALX. However, his long tenure outweighs ALX-claimed independent NED status, and we see a strong presenting argument to reduce the size of ATLIX’s board, which comprises of ALX’s Bermuda based directors. We are undecided on the approval of the auditor, where we are seeking assurances the continuity of PWC as the audit firm has been regularly assessed and request the audit services be put out to tender.
We are voting in favour of the resolutions at GPT’s AGM, despite the element of discretion used in the remuneration for the year. The start of calendar 2021 suggested a return to “normal” conditions and hurdles were set on this basis. Unfortunately, that translated into a return to “new” normal! The return to lockdown conditions and the associated effects on the retail sector meant the Group did not meet its primary target financial measure of FFO per security growth for the year, and the board used discretion to create an incentive pool to address the impacts on the executives, with 15% of the pool going to the Kay Management Personnel.
We will support all the company’s resolutions to be tabled at the AGM. The year ended 31 December 2021 was notable for a turnaround in financial results from the previous year, the beginning of a strategy to seek alternatives to reliance on fossil fuels and a significant acquisition. It also saw the completion of a review of the Lytton oil refinery operations followed by the commencement of a fuel security agreement with the Australian government.
An ongoing COVID-19 impact continues predominantly in lower aviation fuel volumes which, although improving, has some way to go to return to pre-COVID-19 levels. The ASA is cognisant of the fact that Qantas is sourcing biofuel in the US and UK to reduce emissions and asked whether Ampol was looking at supplying biofuel to Qantas in Australia. We were assured that this was under discussion and, moreover, the company is looking at biofuel solutions across the board.
Remuneration Report strike list
This week the Santos AGM was held, and the first 2022 remuneration report strike for ASA monitored companies obtained. We supported all the company sponsored resolutions, but the company ended with a first strike on its remuneration report (25.32%), and an against vote on the growth incentive rights of 24.74%. The Climate Change Report attracted an against vote of 36.92%. In the Chair’s address and via media reports, one of the proxy advisors recommended clients vote against these resolutions. The monitor will prepare a report on the meeting, which will be available in due course.
Other company meetings
AGL Demerger media blitz
AGL first mentioned its plans to create two energy businesses focused on executing distinct strategies, a multi-product energy retailer, and an electricity generator, via a structural separation or demerger on 31 March 2021. At that time AGL said it will immediately commence a process of engaging with shareholders, regulators, government, and workforce stakeholders with a view to confirming the timing and nature of the proposed structural separation by end of FY21. Timing details followed indicating a 2Q 2022 meeting.
This week we heard from Mr Cannon-Brookes, who emerged on Monday with an 11.27% holding and declared his intention to see the demerger is voted down. The voting status of the shares for the meeting has not yet been confirmed as they are not yet owned outright. And we are aware the legal conditions and obligations around any proposals from a substantial shareholders differ from the company in relation to its shareholders.
Also, at the start of the week, the company advised it is committed to the demerger and shareholders will receive the Demerger Scheme Booklet in the coming weeks with the General Meeting and Scheme Meeting expected to be held on 15 June 2022.
Your ASA Monitor and I are ready to scour the documents on release (we expect them to be heavy reading so please give us some time to do so). We aim to make sure AGL shareholders have the information needed to make an informed voting decision reflecting their circumstances and views. Members are already sharing questions with us, and we are happy to receive your questions by email at: [email protected]
There are two meetings scheduled to gain approval for the demerger of Tabcorp’s Lotteries and Keno business from its Wagering and Media and Gaming Services businesses, to create two separate ASX-listed gambling entertainment companies. The meeting to approve the capital reduction, which will facilitate the demerger, will be held first and if approved the meeting to approve the demerger will follow immediately.
The demerger will be achieved by separating off The Lotteries Corporation, which will hold the lotteries and keno assets of the current Tabcorp. This business represents about sixty percent of Tabcorp’s current revenue. The new Tabcorp will hold the remaining assets.
If approved, Tabcorp shareholders will receive one share in The Lotteries Corporation for each share they hold in Tabcorp.
Head to Upcoming AGMs on the ASA website to see all the meetings we will attend, and you can read the voting intention and AGM reports on the How we vote page or the Companies we monitor page or excerpts in EQUITY magazine.
Voting intentions reports on these pages are restricted to member-only and you need to login to view the company pages. You can search by ASX code, company name or date of meeting.
Give Your Proxy To The ASA
Your proxy counts! You can vote your shares or give your proxy to the ASA for the meetings above to be voted as outlined in the voting intentions posted to the website. Give your proxy to Australian Shareholders' Association via online voting or give a standing proxy.