- Times and locations of upcoming AGMs can be viewed here.
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Upcoming AGM Overview
This week, another saga that has played out in the media came to a head. The allegations were that the CEO and founder of Mineral Resources had significantly profited from related party dealings with the company and then evaded Australian tax on the profit made. In an announcement to the ASX, Mineral Resources Chair, James McClements, acknowledged the significant wrong doings and tabled what was known as of Monday. The plan to redress the situation includes financial penalties to the CEO of $8.8 million, and loss of remuneration of up to $9.6 million and a 12-18 month transition to a successor. Mr Ellison apologised to the board and through them to the shareholders. The apology starts “I am deeply sorry for the events that have occurred and the impact they have had on MinRes’ reputation” and he promises to work tirelessly to bring back confidence.
An Ethics & Governance Committee made of current independent directors has been established to further increase the separation between the Company’s affairs and Mr Ellison’s personal affairs and improve the company’s internal controls. McClements, who has chaired the company for 10 years, has committed to step down at or before the FY25 AGM. The 2024 AGM will be held 21 November. We shall ask why the chairman failed to take action earlier and vote against the rem report again. And we will be closely monitoring how the transition to better governance is made.
At this week’s AGMs, Nine Entertainment Co. received a first strike on its remuneration report with a 37.43% against vote reflecting its poor performance rather than its remuneration structure, and IGO came close with a 24.43% against vote as shareholders vented over the impairments associated with the takeover of Western Areas.
Voting Intention Reports published in the past week
This week, we have published the voting intention reports listed immediately below, which you can read via the links on the headings.
Flight Centre Travel Group (ASX: FLT) – AGM Thursday, 14 November 2024
FLT delivered a record $421m operating cash inflow during FY24, solidifying the balance sheet with more than $500m investment in capital management initiatives. However, the share price fell 20% after a cautious first quarter trading update. Market guidance will be provided at the AGM, with profit again expected to be heavily second half weighted. The company highlighted the efficiency and productivity improvements achieved since the global pandemic. We are supporting all the resolutions.
Sandfire Resources (ASX: SFR) – AGM Friday, 15 November 2024
What a difference a year makes! Shareholders who participated in the 2023 placement & share purchase plan (SPP) at $4.30 per share will have noted the current share price of $10.44 and FY24 Total shareholder return of 48%. At the AGM, we will support all resolutions except the board spill if the remuneration report gets another 25% or more vote against. We will seek an update on the prioritised return to a net cash position (noting net debt excludes capitalised transaction costs, leases and revolving short-term working capital facilities) and dividend recommencement.
Lendlease Group (ASX: LLC) – AGM Friday, 15 November 2024
Firstly, we’re pleased that LendLease is holding a hybrid AGM so that all shareholders can participate. LendLease announced a strategy to simplify the business, focus on its strengths and release less productive capital. Chair Michael Ullmer will retire as a director and be replaced by Chair-elect John Gillam who is standing for election as a director at the AGM and will lead Lendlease through a period of significant change. We will support his election and the re-election of Nick Collishaw. We will not be supporting the remuneration report or the allocation of market priced options to the MD as a Transformation Award, as we have some concerns about an overemphasis on a quick share price turnaround. For more read our report.
Monadelphous Group (ASX: MND) – AGM Tuesday 19 November 2024
Monadelphous has performed very well over the last year with double-digit growth in revenue, net profit after tax, earnings per share and dividend. For Board matters our only quibble is the tradition of Monadelphous to have an Executive Chair, Rob Velletri. Four of the six directors are independent, and a lead independent director, Sue Murphy AO, has been designated. The Executive Chair does not sit on the Audit and the Remuneration Committees. These two committees are entirely formed of the independent directors. We are supporting all the resolutions.
Sonic Healthcare (ASX: SHL) – AGM Tuesday 19 November 2024
The issue for the upcoming AGM for ASA is the use of “fair value” in the remuneration plan via the use of options in the LTI. We will be voting against the remuneration report and the LTI for the executive directors. We will support the re-election of Kate Spargo and the increase to the non-executive fee pool. In relation to the financial results, FY24 saw a rapid reduction in COVID-related flows to the extent that this is now largely business as usual. Acquisitions are generally performing well, although there are some large acquisitions in more recent years (including FY24) that will take longer to realise synergies. There are several well-advanced initiatives in progress to improve the profitability of the business overall. The coming together of these disparate factors effectively means that FY24 is an inflexion point for the company and FY25 going forward should see cost reductions, improvement in profit margins and thus profitability.
Downer EDI (ASX: DOW) – AGM Wednesday 20 November 2024
Downer has enacted major changes to personnel and structure and is changing the auditor as the result of exceptional circumstances, which came to light late in 2022. Accounting irregularities were identified in its Australian Utilities business involving historical misreporting of revenue and work in progress in one of Downer EDI’s maintenance contracts, which had resulted in a historical overstatement of pre-tax earnings. We will be supporting the election of Peter Barker and the remuneration report and issue of equity to the MD. Overall, the company has a very good and detailed remuneration structure. We will also support the appointment of PWC as auditor after legal action has been commenced against the auditor at the time of the of the accounting irregularities, KPMG.
Worley (ASX: WOR) – AGM Thursday 21 November 2024
The Worley share price has decreased in 2024 after almost getting back to the levels it enjoyed in 2018 and 2019, although there was a hopeful lift on a 3-year basis with total shareholder return of 83.5%. In contrast, executive bonuses have increased with equity having been issued at the lower share price, which raises questions about the alignment between executive compensation and shareholder returns in more cyclical businesses. Consequently, we intend to vote against the adoption of the remuneration report and the grants of deferred equity rights and long-term performance rights to the CEO, Chris Ashton. ASA will vote open proxies in favour of the re-election and election of directors, approval of the company’s Employee Share Plan, and the changes to the company’s constitution.
Mineral Resources (ASX: MIN) – AGM Thursday 21 November 2024
The usual business for the AGM has been overwhelmed by the integrity issue mentioned in our summary above. Past governance has been shown to be severely deficient and we shall ask why the chairman failed to take action earlier with respect to a number of matters dealt with in the ‘governance and culture’ section in our voting intention report. We voted against the remuneration report last year, and will do so again this year. The resolution for the issue of equity to the MD has been withdrawn as part of the raft of penalties applied in the face of the revelations. Two new independent non-executive directors are nominated for election. Both candidates have appropriate skills and experience to lend strength to the board so we will support their election.
NEXTDC (ASX: NXT) – AGM Friday 22 November 2024
NEXTDC, first listed on the ASX in 2010, has recently entered the ASX top 50 companies by capitalisation ranking. The company describes FY24 as being the year Artificial Intelligence (AI) emerged as a “truly transformative technology, revolutionising economies and communities”. In our pre-AGM meeting, we queried the lift in FY24 capital expenditure to $1,003 million which compared with guidance of $850-900 million and prior year capex of $695.7 million. We were told that additional investment opportunities arose during the course of FY24, which saw capital raisings in May and September. We are supporting all the resolutions, including the re-election of the Chair who has held the role for 10 years, and the increase to the director fee pool, given the rapid increase in the size and geographical focus of the company.
In case you missed the reports published in prior weeks:
Coles Group Limited (ASX: COL) – AGM Tuesday, 12 November
The company put in a strong financial performance considering the climate in the last year. There are political and regulatory challenges being faced by Coles Group, with a senate inquiry into higher prices and rising profits and an ACCC inquiry into misleading customers with discount pricing, which the company intends to defend. There were changes at the board level during the year with the retirement of Paul O’Malley and appointment of two new board directors, Mr Peter Allen and Mr Andrew Penn AO. We are supporting the board sponsored resolutions at this meeting, with the remuneration and board composition meeting ASA’s key guidelines. As with the Woolworths AGM, shareholders will have the opportunity to consider Coles’ position on the sourcing of salmon from Macquarie Harbour and its impact on the Maugean skate population. While not supporting the resolutions, we look forward to the discussion.
Beach Energy (ASX: BPT) – AGM Wednesday 13 November 2024
The company is experiencing a number of issues, such as the 8% decline in 1P reserves, 20% decline in 2P reserves and 21% decline in 3P reserves (a significant negative outcome), as well as the cost and time over-runs at Waitsia. We are concerned about the failure to appoint an Independent Chair in a timely fashion, but have accepted the decision on the understanding that it is only temporary and that it is intended to provide continuity of the board through a difficult short-term period and preserve the ‘corporate memory’ whilst the new CEO is putting his team in place. We are supporting the resolutions.
Endeavour (ASX: EDV) – AGM Wednesday 13 November 2024
Last year, the AGM was acrimonious. The largest shareholder, Bruce Mathieson Snr (15%), attempted unsuccessfully to have Bill Wavish elected as a director. The subsequent sale of Woolworths shareholding, the loss of the two Woolworths directors and appointed chairman, and now the “retirement” of the CEO is unsettling.
ASA plans to vote in favour of the election of Peter Margin as a director and the approval of the long-term incentive grant to the Managing Director and CEO. However, we are undecided on the election of Ari Mervis as a director and will seek some understanding as to what he sees as the future for Endeavour, and how it might differ from the direction developed by the prior Cahir Peter Hearl and outgoing CEO, Steve Donohue. We plan to vote against the adoption of the remuneration report driven by the removal of the 20% LTI measure, Leading in Responsibility.
Medibank Private (ASX:MPL) – AGM Wednesday, 13 November 2024
Medibank has continued to perform solidly with earnings per share continuing to rise and a consistent total shareholder return in line with their strategic focus on customers and their desire to improve the way healthcare is delivered in Australia. The company is defending the legal actions currently underway from the cybercrime event.
We are supporting the resolutions but are disappointed that, at the AGM, Medibank will continue to present all Resolutions together before opening the meeting to shareholders’ questions. A plus is the proxy details will be displayed. Directors seeking re-election and the Chair of the Remuneration Committee will not speak to the meeting other than to answer questions.
Goodman Group (ASX: GMG) – AGM Thursday, 14 November 2024
Goodman produced strong financial performance in a challenging market, with property devaluations due to rising capitalisation rates (which follow interest rates)
The outlook is positive, particularly associated with increasing emphasis on data centres. We are supporting all the resolutions despite the very high remuneration levels, which are driven partly by large increases in the security price. We will decide whether to vote for or against the re-election of the second executive director on the board, Danny Peeters, after hearing the case for his re-election at the AGM. The board is supportive of Danny’s re-election but the ASA does not generally support the addition of additional executives beyond the CEO to boards.
Computershare Limited (ASX: CPU) AGM Thursday 14 November 2024
Following a significant turnaround over the last 3 years, the business has shown an excellent return for investors with the one-year total shareholder return being 16%. The performance is heavily influenced by interest rates (due to all the funds they hold in transition), and the company has stated that it expects FY25 to be another year of positive earnings growth with lower interest rates globally, and hence lower margin income, anticipated to be offset by other profit drivers.
We have determined we will vote open proxies in favour of all the resolutions though the high level of CEO remuneration relative to Australian peers made this an on-balance decision for the remuneration report and long-term incentives. Computershare is a global company and that they are competing for talent in global markets and that they benchmark against companies of similar size and industry in the UK and USA.
Mirvac Group (ASX: MGR) – AGM Friday, 15 November 2024
Unfortunately, with a continuation of the current market conditions (peak interest rates, falling inflation) the Group is forecasting that FY25 will see a lower operating result again, predominantly from lower development earnings and higher net interest costs on development activities. However, the Company believes the FY25 will be the bottom of the market and FY26 will start to see the benefits of their new strategy (domestic/offshore capital partners, portfolio reallocation) and organisational restructuring.
We are voting in favour of the resolutions, but call on the company to stop increasing the number awarded to adjust for estimated dividends over the three years of the LTI.
BlueScope Steel Limited (ASX: BSL) – AGM Tuesday 19 November 2024
The company has experienced reduced steel spreads, which has impacted profitability. The North Star expansion project in the USA has been successfully completed and a further debottlenecking project approved, while at Port Kembla, the Blast Furnace relining and upgrade project is underway.
We are supporting all resolutions except the request for an increase to the feel pool and the number of directors. The company argues that this change is needed to enable knowledge transfer between incoming and outgoing directors, and to ensure appropriate experience, skills and diversity of directors. In 2021, the board sought and received shareholder approval for a temporary increase in director numbers from ten to twelve, which is still in place and expires at the 2025 AGM. Its purpose was to ensure an orderly transition of directors. Since 2021, the board has not fully taken advantage of the new cap to enable the transition it sought. The director skills matrix indicates that at least nine of the ten directors have advanced capability in the main board skills required. We are concerned that having a higher permanent cap could promote a lack of discipline and rigour in succession planning, and that the opportunity remains in the next 12 months to utilise the temporary cap.
WiseTech Global (ASX: WTC) – AGM Friday 22 November 2024
On a purely operational financial basis the company had a great year. But after a period that reminded us of the company’s immaturity, which is in sharp contrast to its size, we have gone back to basics with a vote against the remuneration report and grant of equity to an executive director. We expect the remuneration framework to mature and be in keeping with an ASX200 company. We are supporting the director elections and increase to the aggregate fee pool, as we encourage continued evolution of the board.
AGM Reports
Read about ASA at these AGMs:
Car Group, Kelsian, Cleanaway, Polynovo, Dexus, Ansell, McMillan Shakespeare, Corporate Travel, Data#3, APA, ASX, Woolworths, Austal
If you hold shares in any of these three companies, we encourage you to submit your proxy to us for representation.
