By Fiona Balzer, Policy and Advocacy Manager, and Damien Straker, Advocacy Coordinator
21 October 2022
AGM season
The season is around 20% complete. Voting has been benign in most cases with many for votes exceeding 98%. However there has been some stand out against votes in this past week. Blackmores received a remuneration report first strike with an against vote of 43.35% and similar against votes on the grant of equity to the CEO for the short- and long-term incentive.
Major shareholder, Marcus Blackmore, spoke out against the company’s share price performance and we assume voted his 23% shareholding against these resolutions. APA had more than 20.6% vote against its Climate Transition Plan which contrasts with Origin Energy where the vote on the Climate Transition Action Plan was 93.55% FOR.
At Bapcor’s AGM the termination benefits to the prior CEO were voted down with a 53.28% against vote – legislation (Since 2009, the Corporations Act requires shareholder approval before termination payments in excess of 12 months are paid to executives) and shareholders working together to ensure golden handshakes are a thing of the past.We have been working on our voting intentions for AGL Energy, interviewing the prospective independent shareholder-nominated directors and having the pre-AGM meeting. The report will be available next week.
Strike Count for ASA monitored companies
Company/Against vote on remuneration report
Santos 25.32%
ASX 30.52%
Blackmores 43.35%
Upcoming company meetings
ASA will attend more than 30 AGMs again next week, including those shown in the table above and Credit Corp, Codan, Dexus, National Storage REIT, APM Human Services, Challenger, Corporate Travel, Data#3, GUD, JB Hi-Fi, Reliance Worldwide, Super Retail Group, Carsales.com, GWA, ARB and Rio Tinto’s EGM.
We suggest you refer to the full list of upcoming AGMs here. Voting intention reports will be available approximately two weeks prior to the AGM date.
Argo (ARG) AGM
Argo’s remuneration arrangements are unchanged from 30 June 2020 when Argo significantly lowered hurdles for performance-based long term incentive remuneration. ASA did not support this change. Argo’s most recent 1-year NTA performance against the S&P/ASX 200 Accumulation Index benchmark is positive, but long term (5, 10, 15, 20 years) performance against the S&P/ASX 200 Accumulation Index benchmark continues to be negative. With increased remuneration for lesser performance continuing, ASA will vote against the Remuneration Report (as we did in 2020 and 2021).
In their Annual Report 2022 (pp 33-34) Argo advises changes to the Remuneration policy for FY2023 including introducing an additional 10 year performance condition and remuneration tranche. We are hopeful this long term performance hurdle will increase alignment between Argo and ASA member long term interests. ASA will assess these changes when details are made – forecast to be in FY2023.
Read the full voting intentions report for Argo here
Tabcorp (TAH) AGM
Tabcorp is another company holding its AGM away from its home state, this time in Queensland. The demerger of The Lottery Corporation (TLC) took place during FY22, and resulted in a one-off boost to Tabcorp’s statutory profit being a net gain on the demerger of $6,514m. There was a slight reduction in underlying profit.
Tabcorp’s remuneration has not reduced to reflect the reduction in size and complexity of the company after the demerger.
The Lottery Corporation has a market capitalisation of $9,100m and Tabcorp’s is $2,200m. The remuneration levels of the CEO and Board are too high. Further, the decisions on retention/notice payments and vesting of outstanding LTI awards were overly generous. For these reasons we will vote against the remuneration report and the grant of options to the CEO.
We also flag the company continues to make political donations. ASA is not in favour of companies making political donations, but at least Tabcorp now disclose the quantum of donations in the annual report. In FY22 a total of $216,000 in political donations were made (FY21: $186,000). These are typically balanced between the parties. When discussed with Tabcorp previously, they believe that involvement in political party forums is important in protecting shareholder interests.
Read the full voting intentions report for Tabcorp here
Codan (CDA) AGM
2022 has been a transformational year for Codan with the inclusion of DTC and Zetron results, lifting revenue for the Communications division is up 150% over FY21.The Detection division revenue however is down 20%, driven in part by loss of market access to Russia and Sudan. We are supporting the resolutions despite the disappointing share price performance – the amounts are not excessive.
Read the full voting intentions report for Codan here
National Storage REIT (NSR) AGM
National Storage has continued to perform well, particularly given some of the challenges of COVID-19. The company has sensibly proposed two sets of resolutions for company and trust, to change their constitutions. One resolution is to allow virtual only shareholder meetings which we will vote against, and the second resolution covers a number of non-contentions changes which we will support.
Read the full voting intentions report for NSR here
APM Human Services International (APM) AGM
We have a number of issues with this company that listed late in 2021. The size of remuneration and allocation of performance rights using fair value (where there is a deep discount to market price) means we will vote open proxies against the remuneration report and grant of performance rights. We will also vote against the re-election of William Ritchie, one of the representatives of major shareholder MDP, due to the board lacking independence and MDP holding a greater proportion of boards seats than its shareholding.
Read the full voting intentions report for APM here
In case you missed it:
Carsales.com (CAR) AGM Read the full voting intentions report for Carsales.com here
Credit Corp (CCP) AGM Read the full voting intentions report for CCP here
Woolworths (WOW) AGM Read the full voting intentions report for Woolworths here
GUD (GUD) AGM Read the full voting intentions report for GUD here
South32 (S32) AGM Read the full voting intentions report for South32 here
Wesfarmers (WES) AGM Read the full voting intentions report for Wesfarmers here
Corporate Travel (CTD) AGM Read the full voting intentions report for CTD here
Data3 (DTL) AGM Read the full voting intentions report for Data#3 here
JB Hi-Fi (JBH) AGM Read the full voting intentions report for JB Hi-Fi here
Super Retail Group (SUL) AGM Read the full voting intentions report for SUL here
Kelsian Group Limited (KLS) AGM Read the full voting intentions report for KLS here
Rio Tinto (RIO) EGM Read the full voting intentions report for Rio Tinto here
