The withdrawn resolutions at Aussie AGMs

May 4, 2019

Not enough resolutions are rejected by shareholders but here is a list of those that have been.

Australian shareholders have historically had an appalling culture of rarely proposing resolutions of their own to be voted on and accepting whatever company resolutions boards dish up for approval at the annual general meeting. When a resolution does run into trouble, rarely does it actually get defeated because the company usually withdraws it when the proxies are running badly. There are only a handful examples of this happening and, in chronological order, they are:

Southern Cross Broadcasting: Announced the withdrawal of a resolution to increase retirement benefits for directors at 5.51pm on a Friday, October 26, 2001 as you can see here.

John Fairfax: Withdrew a proposed change to its constitution regarding proportional takeovers in 2001 but the losing proxy count was still released here. It was a special resolution requiring 75% approval and Fairfax only had 64.5% of the proxies in favour.

AMP: Withdrew its ludicrously generous and complex incentive schemes proposals for new CEO Andrew Mohl and current HHG CEO Roger Yates before the 2003 AGM after angry shareholders vowed to vote them down given the billions that had just been lost in the UK. Check out the backdown announcement here.

News Corp: I still think the rejection of Rupert's proposed options issue without performance hurdles for six executive directors at the 2003 AGM was the trigger for the move to America. The Sun King said it was Australian institutions who objected and it must have been some sort of "crazy misunderstanding."

Harvey Norman: called an EGM in 2003 to reprice 14.5 million out-of-the-money options held by the executive team but then cancelled the proposal after a big protest from institutional shareholders. Check out the announcements in the middle of 2003 here.

Harvey Norman again: called an EGM for April 30, 2010, to issue 17.5 million options at market prices to a range of executives with very modest performance hurdles, effectively replacing an earlier out-of-the-money scheme. Was cancelled with this terse one paragraph statement from executive chairman Gerry Harvey on April 23. We had to cancel flights.

Hills Motorway: John Cassidy resigned from the board one day before facing a re-election ballot at the 2004 AGM because it was clear the proxies were running against him. This is one of the few times in recent history than an endorsed incumbent director has been booted off a board.

Fleetwood Corporation: A proposal to issue options to executive directors was withdrawn at the 2004 AGM due to opposition from shareholders, although the company blamed "the inadvertent omission of some technical information required by the ASX."

board-endorsed director Peter Kerr quit the day before the 2005 AGM knowing he was going to be swept out by the proxies for suing his own shareholders for $100 million.

Rio Tinto: a proposed constitutional change to limit class actions in the US was rolled by shareholders at the AGM on May 4, 2006, causing an embarrassing withdrawal as you can seen from this announcement.

Tabcorp: board was forced to dramatically withdraw a motion to grant up to 2.5 million performance options to managing director Matthew Slatter at the November 2006 AGM, conceding that the motion had already been outvoted six to four by proxy votes.

SP Ausnet: cancelled its proposed $8.3 billion of the Alinta assets from its parent Singapore Power the day before the scheduled meeting on December 11, 2007. Whilst deteriorating debt markets was the publicly stated reason, the proxies were rumoured to also be in trouble. Indeed, higher debt costs made the deal uneconomic so both scenarios were probably true.