By Fiona Balzer, Policy and Advocacy Manager, and Damien Straker, Advocacy Coordinator
18 November 2022

AGM Season

We have 31 annual general meetings (AGMs) next week, and only 17 more to attend by year end!

This week was dominated by the AGL Energy AGM, where all directors on the ticket were elected, and a remuneration report strike was awarded with a 30.69% against vote. We voted as per our voting intentions report and for the two elections where we were undecided. We voted in favour of the election of Christine Holman where we considered her video address content to addressed what the board needs and how she will contribute and she answered our concerns about workload and independence.

We did not support John Pollaers election to the Board given we thought the other directors elected brought listed company and diverse experience to the Board. We recognise and respect that shareholders elected Mr Pollaers to the Board and look forward to the Board setting the strategy in motion. The Climate Action Transition Plan was approved with 69.31% in favour. Now it is up to the board to come together, knuckle down, and support the executives and staff to deliver!

All our company monitors are volunteers who devote a lot of time, energy and skill to representing ASA at the huge number of AGMS. At times that effort becomes greater in situations such as AGL Energy with a demerger meeting to prepare for, as well as the unusual circumstance of 4 shareholder nominated director candidates. We give a special vote of thanks to Helen Manning who is the ASA representative for the company. We also note the support of Mike Robey and Julieanne Mills at the meeting. Medibank Private’s AGM saw the data breach feature heavily in the questioning, although all the resolutions were carried.

Our representative Peter Aird, contributed substantially to media coverage of the AGM, and had emphasised the resolutions covered the FY22 year performance. The Chair Mike WIlkins advised the completed review of the breach will be taken into account in the FY23 remuneration outcomes which are linked to performance. Next week, The Star Entertainment Group’s AGM will be held in Broadbeach. We expect intense questioning on how the company will regain its credibility and address the matters raised in the reports, which found the company unfit to hold a gaming licence. The new directors and CEO will be part of the solution but shareholders will need convincing.

Strike Count for ASA monitored companies

Evolution Mining (EVN) AGM
It was a disappointing year for Evolution (EVN) with results not living up to expectations mainly due to weather events, COVID absenteeism and travel restrictions, and supply chain issues. The remuneration is reasonably generous across the company with potentially large long-term incentives at stretch. The reduction this year in short-term incentives and LTIs and the outcomes for key management personnel does indicate it is working.

An initial concern for the ASA is the independence of the board with an Executive Chairman. We wanted to understand how this will be managed and work for the company in the long term. We also investigated what preparation is in place for succession and to protect the independence of the board, and how conflicts, including in the setting of remuneration, are resolved. The executive chair role is not one the ASA generally supports in an ASX100-listed company.

In Evolution’s case the executive chair is also the founder of the company and like many mining companies the success is largely due to him, a loyal team, and a consistent strategy. He has delivered on the strategy. As Jake Klein has said, he set out to develop a small gold mining company that could take advantage of long life, low cost and higher margin, quality assets in safe jurisdictions. The appointment of a new lead independent director this year, along with the promotion of the CFO to the role of CEO/MD, appears to be a move towards a more sustainable long-term governance framework. We are supporting all the resolutions.

Read the full voting intentions report for EVN here
 

QUBE (QUB) AGM

In spite of headwinds of shipping disruptions, extreme weather events, lockdowns, and labour shortages, Qube delivered a strong financial performance for FY22 with revenue from ongoing activities increasing by 27.7% and underlying net profit increasing by 30%.

The tenure of non-executive directors, assuming that all resolutions for election are carried, will comprise of 4 who were appointed in 2011, and 4 who have been appointed since 2019. This gap of 8 years between these two groups is unusual and creates a challenge for Qube in transitioning to a broader spread of experience and new perspectives on the board. The board is aware of this and is working through a process of board renewal.

In determining our voting intentions on these resolutions, we are conscious of ASA’s position that a director will not be considered independent after 12 years. Allan Davies was appointed to the board in 2011, and is currently serving as chair. Alan Miles was also appointed to the board in 2011, and is chair of the Safety, Health and Sustainability (SHS) Committee. If re-elected both Messrs Davies and Miles will have served 14 years on the board at the end of their terms.

At the AGM, we will ask about their intentions to serve the full term, and their plans for transitioning from their respective chair roles. We will vote for Allan Davies out of concern for the disruption that would result from his sudden departure as chair at this time. We will vote against Alan Miles to avoid the risk of the board having 4 directors who at the end of their term would not, by ASA, be considered independent. We will ask that, if he is re-elected, he will quickly transition out of the SHS Committee chair role.

Read the full voting intentions report for QUB here.

In case you missed it