AGM mini season 2019


May 22, 2019

A chronological look at what happened during the 1999 AGM mini season.

Scentre Group: April 4, Sydney – see notice of meeting. There was a 10.5% protest vote against the remuneration report which the chair wasn't able to explain and Steven Lowy retired leaving no members of the founding family as either a director or senior executive.

ERA: April 9, Darwin. Market cap is down to just $120 million since it ceased uranium mining. No protests of note at the AGM.

CIMIC Group: April 11, Sydney – see notice of meeting. Minority shareholders remain disgruntled with 10% opposing the rem report and 14% voting against the re-election of long-serving non-independent director David Robinson. Considering that the Spanish giant ACS controls 235.7 million shares or 71.88% of the votes, this was quite a protest. Indeed, when you strip out the Spanish, David Robinson was only supported by around 14 million votes with 41.45 million against. You could argue that the controlling shareholder shouldn't have voted on the rem report, in which case it would have copped a strike with 26 million in favour and 29.2 million against.

OZ Minerals: April 15, Adelaide – see notice of meeting. No issues with remuneration but director Charlie Sartain copped a 14.5% protest vote which was workload related. He only joined the board last year and does indeed look overloaded. ASA voted in favour as he does have a strong mining pedigree.

Iluka Resources: April 16, Perth – see notice of meeting. The biggest protest vote of the season so far with 35% against the remuneration report, triggering a first strike. Two proxy advisers recommended against in what was more strong objection to these so-called “combined incentive schemes” which effectively downplay the old long term incentives. It looks like this push from corporate Australia to de-emphasis LTIs is not going to survive. This is a good thing and ASA has campaigned strongly to stop this trend.

Atlas Alteria: April 17, Sydney – a heavy 12 resolutions listed in the notice of meeting and all passed overwhelmingly as investors settle into life at the tollroad company independent of Macquarie.

G8 Education: April 17, Surfers Paradise: see notice of meeting. The only issue was a 20% protest vote against independent director David Foster which looked to be workload related.

MYOB: April 17, Melbourne. See the notice of scheme meeting for the KKR takeover which attracted an unusually high 17% against vote but still achieved the requisite 75% super majority. As is required in schemes, we also got the voting results by shareholders which showed a turnout of just 616 shareholders when the register has almost 5000 holders. Only 26% of those who voted went against so the 50% threshold was comfortably achieved.

Asaleo Care: April 30, Melbourne. Just two directors and the rem report. See notice of meeting. The company is capitalised at $490 million. US firm Essity controls 36% and has 2 of the 6 board seats (see p48 of annual report). Both of their nominees are up for election. Unusual to see a 6% vote against the two insider directors which was a larger protest than against the rem report which sailed through with 99.6% in favour. Essity also chose to vote on the rem report, presumably because their nominee directors don't keep any board fees.

Upcoming AGMS to watch

Once we get through ANZAC Day, the next 5 weeks will see a veritable smorgasbord of interesting AGM gatherings. We published a calendar of AGMs in the March 18 edition of The Mayne Report and here is an update of what is to come with a summary of the issues and resolutions where they are available:

AMP: May 2, Sydney: see notice of meeting. Will probably be the most lively AGM of the mini-season with new chairman David Murray tipped to cop a modest protest vote, partly for refusing to seek shareholder approval for the controversial sale of its life business. Three other new directors – John Fraser, John O'Sullivan and Andrew Slattery - are also up for election and Geoff Roberts is retiring to focus on his executive role at Seek. The longest serving director Trevor Matthews will also be departing from the main board once the life sale goes through. Unusual to announce a new director in Debra Hazelton before the AGM but not actually put it to the vote. Once she joins and assuming shareholders approve the 4 candidates, the AMP board will comprise 9 directors with the longest serving being Mike Wilkins who joined in September 2016. That's quite some turnover and the lot of them could yet face a spill vote if AMP cops a second strike on its remuneration report, although that is rare and unlikely to happen given bonuses were slashed. In the end, chair David Murray attracted the biggest protest vote of 12.7% with some of the industry funds objecting to his failure to put the life insurance sale to a shareholder vote. The rem report was also opposed by 10.59% of voted stock and new director John O'Sullivan, the Coalition's choice for ASIC chair who was rejected by Labor, was opposed by 4.78% of voted shares.

Iress: May 2, Melbourne. There will be some discussion after ASX recently sold its 18% stake at $11.95 a share raising $385 million. With the stock now around $13.60, the institutional purchasers are doing nicely. Ironically, the Iress chair is former ASX CEO Tony D'Aloisio. The notice of meeting includes a $300,000 increase in the fee cap for directors to $1.5 million plus a proposed constitutional amendment to increase the maximum board size from 8 to 10, which is a sensible move. All resolutions strongly supported.

Moelis Australia: May 2, Sydney, 11.30am at company HQ. See notice of meeting. A total of 12.7% against the rem report and this year the insiders didn't vote, unlike what happened last year.

Santos: May 2, Adelaide. The Adelaide Oval is emerging as the favoured AGM venue in the city of churches. See notice of meeting. Should be a flat track with just two directors up for election and an LTI grant for the CEO. Board will be relieved not to have copped another climate related shareholder resolution like QBE and Rio Tinto. No protest with more than 95% in favour of all resolutions. See results.

WPP Australia & NZ: May 2, 10am in Millers Point, Sydney. chair Rob Mactier and fellow NED Kim Anderson are up for election, plus three are 3 rem related resolutions, including 2 approving incentives for the CEO. See notice of meeting. Stock has performed poorly over the past few years but with parent company WPP owning 61.5%, there is not much minority shareholders can do about this. Only two of the 7 directors are classified as independent, including the chair. All resolutions were comfortably approved.

Woodside Energy:
May 2, Perth. A 2pm start which doesn't work well for eastern media cycles. Board also asking for an increase in the fee cap for directors by 500k to $4.25 million. See notice of meeting. Only protest vote was 9.33% against the remuneration report. See results.

Oil Search: May 8, Port Moresby. A busy agenda with 2 directors up for election, 2 resolutions related to the pay of CEO Peter Botten and a proposed 500k increase in the fee cap for the NEDs to $3 million. See notice of meeting. Having been appointed CEO in October 1994, Peter Botten is the longest serving professional CEO in the Australian market and is receiving more incentive grants at this AGM. How long is too long? Sensible to hold the AGM in PNG given the company relies on PNG for all its profit. The board of 10 looks a little large but this allows for 4 PNG-based directors, plus some independent directors with expert industry knowledge, plus a couple of the usual professional director all-rounders. There was a 10% vote against Peter Botten's latest LTI grant and director Agu Kantsler's re-election was opposed by about 7% of voted shares.

Bell Financial Group: May 9, Sydney. The 10th year in Sydney for the Melbourne-based company and still no new independent directors with veteran Graham Cubbin seeking another 3 years. See notice of meeting. Just 1.7% against rem. See voting results.

Caltex: May 9, Sydney – chairman Steven Gregg is up for election but nothing jumps out in the notice of meeting. The recent off-market buy-back was very heavily over-subscribed sparking an 86% scale back which is likely to be raised at the AGM. Biggest protest vote was 4.3% against rem, which was opposed by ASA. See voting results.

QBE Insurance: May 9, Sydney. Will be an interesting AGM after QBE attempts to adjust its pay structures following the big 45.6% vote against its remuneration report last year. The chairman's cover letter in the lengthy 30 page notice of meeting is very focused on the remuneration issues and ignores three shareholder resolutions put up by climate change activists seeking to reduce QBE's ties with the fossil fuel industry. Would love to be in Sydney for this one. Biggest protest vote against a director was John Green with 7.7%. He has been there too long. See voting results.

Rio Tinto: May 9, Perth. Released the notice of meeting way back on February 28 to accommodate its April 10 UK AGM but then embarrassingly had to provide an addendum when shareholder resolutions just for the Australian AGM were subsequently lodged by the Market Forces climate activist group. It all makes for interesting reading. The full board is up for election as per the UK rules for annual elections and former AMP chairman Simon McKeon will be elected for the first time, bringing to 3 the number of Australian directors on the Rio Tinto board. Rem was opposed by 7% and biggest protest was 21% against buyback capacity in the UK. Market Forces resolution just scraped above 2%. See voting results.

Adelaide Brighton: May 10, Adelaide. Billionaire Ray Barro has just negotiated himself into the chair in a delicate governance situation given his Barro group has crept up to 43% and will now have 3 representatives on the board, balanced by 4 independents. See the explanation and details of the governance protocols attached to the notice of meeting. There was a big protest vote against the remuneration report because the board didn't seek shareholder approval for a big payout to the former CEO.

Brisbane Broncos: May 14, Brisbane. One of the few listed pokies and sporting clubs in Australia. Two directors, including club legend Darren Lockyer, are up for election. See notice of meeting. Pleasingly, 4 of the 5 directors are independent of controlling shareholder News Corp. See p11 of annual report.

Invocare: May 14, Sydney. Like with Viva Energy, am surprised they are seeking approval to refresh their placement capacity. Suggests they may do another one. Former CEO Richard Davis is also seeking another 3 years as a NED after already doing 8 years. He took a 4 year break from the company after doing more than 10 years as CEO until 2008. Unusual longevity at both the executive and non-executive level, but he's obviously an industry expert and the long-term performance has been good. See notice of meeting.

Coca Cola Amatil: May 15, Sydney. Former AMP chair Catherine Brenner bows out at the AGM and John Borghetti is seeking re-election to the only public company board he sits on since retiring as Virgin Australia CEO last year. See notice of meeting.

AP Eagers: May 15, Brisbane. Have just launched a hostile takeover bid for rival Automotive Holdings which will generate plenty of AGM debate. See notice of meeting. Just the rem report and two directors up for election as this AGM. One of them is Daniel Ryan, a non-independent who is CEO of WFM Motors, the largest shareholder with 36% of AP Eagers. Given that only two of the seven directors are independent, wouldn't be surprised to see a protest vote against Daniel Ryan. The other director up for election, David Cooper, is an independent with strong experience in the automotive industry.

GPT: May 15, Sydney. A strong female presence at the top table with Vicky McFadden as chair and two other female directors up for election. Eileen Doyle bows out after 9 years which is about right. Prefer directors don't push on for a fourth 3 year term. Angus McNaughton is a good hire as a new NED after spending almost 2 years as CEO of Vicinity. Unusual for CEOs to join rival companies as NEDs, although it happens quite a bit amongst the Big Four banks. See notice of meeting.

Ooh Media: May 16, Sydney – quite a few resolutions including a $300,000 increase in the board fee cap to $1.3 million. Debbie Goodin hasn't suffered from being on the board of Ten Network Holdings when it collapsed and is up for re-election. See notice of meeting.

Dicker Data: May 17, Sydney - just the rem report and 2 executive directors up for election. See notice of meeting. Given the lack of independent directors, expecting that both Michael Demetre and Ian Welch will face protest votes as neither really needs to be on the board. However, given the stock is 70% controlled by founder David Dicker and his former partner Fiona Brown, they can pretty much do what they like. Remarkably, Dicker Data has no independent directors (see p5 of annual report) and is capitalised at almost $700 million. However, given the stock has performed so well since it floated, it is unlikely any institutional investors will be complaining. That doesn't mean a couple of independent directors wouldn't help it do any even better.

Speedcast International: May 20, Sydney. An emerging communications company which is seeking a $200,000 increase in the fee cap for the board plus pre-approval for some terminations payments to the brass, which you don't see all that often. See notice of meeting.

Resolute Resources: May 20, Perth. Stock has performed well of late and now capitalised at more than $1 billion. See notice of meeting. Two directors up for election, plus an LTI grant for the CEO.

Aquis Entertainment: May 21, Canberra Casino. Controlling shareholder Tony Fung is up for election, along with one other director of the boutique Canberra Casino. See notice of meeting.

Reckon:
May 22, Sydney: two directors up for election. See notice of meeting. Market cap only $50m so barely worth covering.

Alumina: May 23, Melbourne. Chinese state-owned giant CITIC is the largest shareholder with 19% and their board nominee, Chen Zeng, is up for election as a non-independent. The controversial selective placement to CITIC of $452 million worth of stock at $1.235 in 2013 has been a boomer for the Chinese with Alumina shares now around $2.35. If was feeling cheeky, would wonder along to the AGM and ask some questions about CITIC's toxic relations with Clive Palmer. See notice of meeting.

Viva Energy: May 23, Melbourne. Surprised they are seeking shareholder approval to ratify an earlier share placement. Does this mean they are planning another big one? The CFO is also seeking re-election when most companies only have one executive director on the board these days. See notice of meeting.

Syrah Resources: May 24, Melbourne (10am, RACV). 3 directors up for election, including chair James Askew. Also approving earlier $94m placement at $2.23 in September 2018, which doesn't seem necessary unless another placement is planned before September 2019. Got an ASX waiver so that nominee companies can vote on this. See notice of meeting. Will receive praise from some shareholders for allowing withdrawals of SPP applications as explained here. The stock is currently near a 7 year low and has been a shocker for investors.

Spark Infrastructure: May 24, Sydney – don't like the complexity of separate director appointments to the main board and then a separate trust. These tax driven trust structures really should be unwound. See notice of meeting.

Sydney Airport: May 24, Sydney. Former Keating Communications Minister Michael Lee is bowing out after 15 years, the Macquarie veteran John Roberts is surprisingly going again even though Macquarie is out and David Gonski is up for election after joining the board last year. Expect he will ultimately succeed Trevor Gerber as chair. See notice of meeting.

Galaxy Resources: May 28, Perth. See notice of meeting.

Costa Group: May 30, Melbourne – a chance to grill the company after its recent profit downgrade. See notice of meeting.

Yancoal Australia: May 31, Sydney.

Appen: May 31, Sydney – may be some retail shareholder anger over this heavily scaled back SPP, particularly given the notice of meeting reveals the directors are seeking approval to replenish the placement capacity. Former ARU CEO Bill Pulver is one of the directors up for election.