1. Proxy advisers and proxy disclosure
There are 5 proxy advisers in the Australian
market – Ownership Matters, ISS, CGI Glass Lewis, ACSI and the ASA. We know ASA is recommending & voting
against the rem report, the CEO's LTI grant & the re-election of Peter
Marriott. Have any of the other proxy advisers gone against the board's voting
recommendations today and if so, please provide the details? Have there been
any material proxy votes against any of the items of business and will these be
disclosed before the debate on each item?
Chair: No one else is against. We'll give you the proxies at the end.
2. Retail shareholder dilution from lifting placement cap
Calendar 2020 produced a deluge of heavily
discounted selective placements to unknown institutions which badly diluted
retail shareholders. This was facilitated by ASX lifting the placement cap from
15% to 25% as a COVID measure. It proved to be a disaster for retail
shareholders. What role did the board play in this decision and do you now
acknowledge this move was a mistake that hurt retail shareholders by diluting
us out of billions of dollars in value, without compensation?
Chair: We saved Australia, blamed others like ASIC and "stakeholders".
3. Chair succession
Could chair Damian Roche please explain the
process by which he was selected to succeed Rick Holliday-Smith as chair? Was
there external facilitation, candidate presentations or a ballot and could the
chair address the criticism that, like him, too many ASX directors come from
the transaction industry as opposed to having an investor perspective. When
will ASX appoint their first ever director who has a clear affinity with the
interests and perspectives of retail shareholders?
Chair: Board secrets stay secret. Waffle about looking retail shareholders.
4. Changes by new chair
Damian Roche was an ASX director under Rick
Holliday-Smith for the past 7 years. What changes has he made since the
handover in April? For instance, will he be paid the same $571,000 base
chairman fee that Rick has received since 2017? Can he also disclose his age
and more about his board experience. Has he done the AICD governance course or
thought about joining other directors at O'Connell Street Associates? Where is
his main office now and before April's succession?
Chair: He turned 50 two weeks ago and has his office on level 1 of ASX. Invited me for a meeting there.
5. Chair's profile and
connections
What is the new chair doing to lift his
profile? How many shareholders has he met as chair? Does he plan to join any
other ASX100 boards like all previous ASX chairs? Why hasn't Damian done any
media interviews since becoming chair and does he have any relevant political
or regulatory connections that could be helpful for ASX? Has the chair ever
been a member of a political party and what is his view about ASX continuing to
make 6 figure political donations every year?
Chair: I've met shareholders, sat in on regulatory stuff, am not a political party member, might do media one day and we'll keep talking about those donations which deliver us access.
6. CEO share sales
The CEO last
week sold 10,988 ASX shares for $944,968 but retains 69,412 fully paid shares
worth $5.65m. Why is the CEO selling shares, particular given The AFR's Joe
Aston recently claimed that he was paid “at least $49 million” during his 3 and
half years as CEO of Challenger. Is that true?
Chair: Not talking about Challenger, he's done the same sales the last 3 years.
7. Jobkeeper and Jasmine Allen
The approach of public company directors to
the widely rorted $90 billion JobKeeper scheme has been under intense scrutiny
with some companies choosing to pay JobKeeper receipts back to the ATO. Could
we hear from the chair on how ASX played JobKeeper and also from Yasmine Allen
on why she and her fellow Cochlear directors first claimed $33 million in
JobKeeper and then chose to repay $23 million?
Chair: Protected Jasmine and said ASX didn't claim JobKeeper. Said to raise the Cochlear question at the Cochlear AGM.
8.
Stephen Mayne Q8 – AI and JobKeeper
Heather Ridout spent many years as CEO of
the Australian Industry Group, which received $4m of JobKeeper in 2020 despite
revenue only falling 6%. AI Group is
also publicly arguing for secrecy about JobKeeper recipients when NZ, the UK
and the US publish this data. The ASX
website claims our company is “leading by example with good governance”. Does
Heather agree that it was wrong of AI to both claim JobKeeper & then
advocate for secrecy? As an ASX
director, does she agree there should be a NZ-style register of recipients?
Chair: protected Ridout from the question and said she'd left AI many years ago.
9. Constitutional reform
The ASX constitution requires a range of 7-15
directors & we currently have 9. This minimum of 7 is larger than most
companies & reduces flexibility for ASX in managing board succession. Will
the board put up a constitutional amendment next year to lower the minimum
number of director to 3, just like AFIC, AGL, Alumina, Ansell, APA, Argo,
Aristocrat & Aurizon - and that is
just the companies starting with A. And if doing a constitutional amendment,
would you also consider introducing a 12 year tenure limit for directors?
Chair: Happy with constitution, so no changes.
10. Peter Marriott re-election
Having already served more than 12yrs on the ASX board, why
is Peter Marriott running again? Many other boards don't allow this sort of
extended service. Could the new chair outline what tenure limits currently
apply to ASX directors & whether he supports changing this? As chairman of
the audit & risk committee, can Peter please outline what oversight he had
in managing the risks that were taken ahead of last year's whole day outage,
which has jeopardised our monopoly licence?
Chair: we've already covered that. Check against transcript as Marriott may have commented.
11. Chair tenure
It has taken ASX too
long time to move on from its pre-demutualisation chairs. Maurice Newman
chaired ASX when it demutualised in 1998 & didn't retire until 20yrs later
in 2008, when he was 70. Rick was chair of SFE when it demutualised in 2000,
steered it through the 2006 merger with ASX & then only retired in April
this year when he was 71, 21 years after SFE floated. Can the new chair promise
that he won't do 20 years as well? Given this history of excessive chair
service, why not put tenure limits into the constitution?
Chair: I won't be doing 20 years. No plans to change constitution.
12. Atlassian
Atlassian is a Sydney-based tech
company which has been NASDAQ listed since 2017 and now has a market cap of
more than $US100 billion. Summarise what steps ASX has taken to get Atlassian
to at least take out a secondary listing on the ASX? Have we been too
inflexible on price. Why do the chair and CEO think Atlassian has kept
rejecting ASX?"
Chair: Can't talk about specific companies but note they have a dual class voting structure which we don't allow.
13. Outage accountability
Why did Rick retire in
April rather than seeing out his full term & saying farewell today? There
was no inkling at last year's AGM that it was his final meeting after 20 years
on the SFE & ASX boards. Did Rick jump early or was he pushed after the
problems with CHESS & the trading outage last November? If not Rick, who
has been held accountable for the outage given that risk committee chair Peter
Marriott is running again today? Is the recent departure of deputy CEO Peter Hiom
on July 1 an example of executive accountability?
Chair: waffle
14 -
CEO bonus and share sales
Does the CEO think it
was reasonable to have his target bonus cut by 20% in 2020-21, in light of last
November's outage. And could he please comment on his recent shares sales. Is
it his intention to continue the 3 year trend of shares sales mentioned earlier
in the meeting by the chair and was The AFR correct in its recent reporting
about the size of his pay packet at Challenger?
Chair: waffle and protected CEO from answering.
15. Shareholder turnout on rem and other matters
Do you know how many ASX shareholders voted on the
remuneration report today and how many are engaging with today's online meeting?
When disclosing the outcome of all resolutions on your website, could you
please advise how many shareholders voted for and against, similar to what
happens with a scheme of arrangement? This will provide a better gauge of
retail shareholders sentiment on all resolutions and was a new best practice disclosure
initiative recently adopted by Metcash after its AGM.
Chair: Yeah, nah.
16. Annual election of directors
Treasury Wine Estates has voluntarily moved to annual
elections for directors in line with best practice that occurs in both the US
and the UK. Dual listed companies like News Corp, BHP and Rio Tinto all do this
due to the laws in the US and UK. What does Heather think about this idea and
could the chair comment on whether ASX
will consider following suit to lead by
an example on governance by being more regularly accountable to shareholders.
Chair: protected Heather, rejected suggestion.
17. Opinion-based shareholder resolutions
As our longest serving director, could Peter Marriott
comment on why Australian boards so afraid of listening to the opinions of
shareholders by way of non-binding shareholder resolutions? These are standard
practice in the US yet dozens of ASX listed companies have now recommended
against these amendments. Would ASX consider blazing the trail on this issue by
amending its constitution to allow for
opinion-based shareholder resolutions? If not, why not be a best practice
leader on shareholder engagement and empowerment?
Chair: yeah, nah.
18. Early disclosure of proxies
Could the proxy votes please be displayed before the
remuneration report debate so that shareholders have an opportunity to ask
questions about the figures. This is ASA best practice. Also, why did ASX
refuse a polite request to lodge the proxy votes with the ASX along with the
formal addresses before the AGM started, just like Afterpay and Ausnet did at
their previous AGMs? Please get with the disclosure program, Mr New Chair.
Chair: Yeah, nah.
19. Heather Ridout conflict
Does Heather know if Australian Super has voted its 5% stake
in favour of her re-election today or have they abstained due to a conflict of
interest?
Chair: protected Heather and went to general counsel who had to ask for the question to be read out again and then said Heather wouldn't know how Australian Super voted. Couldn't the lady be allowed to speak for herself?
20. Succession management
Succession management should be a key KPI for long term
CEOs. After the departure of deputy CEO Peter Hiom on July 1, could the CEO and
chair both comment on whether they believe there are multiple potential CEO
successors currently on the payroll at ASX?
Chair: protected CEO and once again, effectively declined to answer the question apart from waffling about the board closely monitoring succession issues.
21. Request for transcript
We have covered a lot of territory at today's AGM and thank you for
reading out all submitted questions without any censorship. In the interests of
full transparency, could you confirm that ASX has indeed agreed to follow the
lead of companies like Crown Resorts, Transurban, Woolworths and AGL by
publishing a full transcript of today's AGM on your website, along with a full
video of the webcast. Could the transcript include a comment by the CEO on why
he needs to keep accepting LTI grants after 5 years as CEO?
Chair: yes, we'll produce a transcript, the only concession for the day.
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