14 Questions asked at 2021 Charter Hall AGM
November 12, 2021
Below are the 14 written questions lodged at the 2021 Charter Hall AGM held on November 11, with all but two of them asked.
1. Did any of the 5 main proxy advisers
in the Australian market - ACSI, ASA, Ownership Matters, Glass Lewis and ISS -
recommend a vote against any of today's resolutions, including the remuneration
report? Has their been a material proxy protest vote against any of today's
resolutions? Will you disclose the proxy votes before the debate on today's
resolutions so shareholders can ask questions if there have been any protest
votes?
Answer: Yes, there's an issue with the retention bonus grant as you'll see later.
2. The AFR reported this week that Australia's biggest
auditor PwC has used dozens of unqualified workers, on lower salaries and with
less training and resources than their main office counterpart, to complete
audit work for large listed clients from an unbranded office in western
Sydney's Parramatta. Could our PwC auditor Ewen please comment on whether this
is true and whether any Charter Hall auditing was done from this office. What
is the Charter Hall reaction to this revelation?
Answer: Auditor read a prepared
statement saying that the Parramatta office was used but all staff were
overseen by qualified professionals.
3. Why is Charter Hall moving so
aggressively into gambling with the proposed acquisition of ALE Group,
Australia's biggest owner of pubs with addictive poker machines? Are you
prepared to get involved to drive more responsible practices such as not
allowing the Victorian venues to stay open the maximum 20 years a day. Nothing
good will be happening at all these Charter Hall pokies pubs at 3am?
Answer: chair David Clark said
Endeavour Group was responsible for everything and that pokies were only “one
small part” of the revenue stream. Wrong, try almost 50%.
4. Charter Hall branded listed entities
have raised billions of dollars through multiple equity raisings over the past
decade. Why have you never done a PAITREO capital raising which treats all
shareholders equally and compensates non-participants. The biggest losers in
Australia's anything goes capital raising system is the retail shareholder who
fails to respond to an offer. That is usually a majority of retail investors
even when an offer is in the money. Please embrace the PAITREO to stop these
retail shareholder rip-offs.
Answer: chair David Clarke made no
commitments and didn't seem to understand the benefit of the PAITREO. Claimed
rights trading is uncommon these days when there have been 6 so far
in 2021.
5. Ten years ago, our chairman David Clarke was
effectively forced off the AMP board due to the stench surrounding the collapse
of Allco Finance Group, where David was installed as CEO late in the day,
arguably when it was too late to save as the GFC hit. Could he comment on whether he feels a sense
of redemption given the outstanding financial performance of Charter Hall,
particularly in recent years. What lessons did he learn from the Allco
collapse?
Answer:
wasn't asked as chair censored this one.
6. In February 2010, we bought Macquarie's Australian property platform. With the
benefit of hindsight, was this the most important and value accretive deal
we've done as a listed company? Macquarie was placed 10% of Charter Hall as
part of that deal. When did they sell out and was the exit profitable for
Macquarie.
Answer: chair said acquisition was
strategically very important to get scale and CEO described it as a “win-win”
given that Macquarie sold out 3 years later doubling their money.
7. I'm a local government councillor at
City of Melbourne in Melbourne's eastern suburbs. Council's are traditionally
inert and uncommercial when managing their own billion dollar property
portfolios and are reluctant to partner up with major property sector players.
Can the CEO cite examples of councils across Australia which have sensibly
partnered with Charter Hall in arrangements which have delivered good outcomes
for all stakeholders.
Answer:
CEO cited Charter Hall's ownership of the Brisbane City Council head office and
bus depot.
8. Jacqueline Chan currently sits on 3 major board and also continues to work as a
management consultant for McKinsey. This is unusual for a professional
director. Could she please provide more information about her McKinsey
arrangement, including how conflicts are managed. How much time each week is
she spending on McKinsey matters?
Answer: the McKinsey work only
amounts to about 1 day a month.
9. The CEO owns 1.413 million ordinary
shares worth $26.7 million based on the current price. He has done extremely
well for shareholders. Is he concerned about the shareholders opposition to his
LTI and how important is this grant to keep him motivated?
Answer: CEO didn't comment and chair
deflected on the protest vote saying this scheme hadn't changed in years. He
was right, as it was the later retention bonus which had the big protest vote.
10. What is the actual intention in terms
of board fees once this item is approved? Don't be afraid to give yourselves a
pay rise given the performance has been so strong?
Answer:
thanks for the praise, nothing planned as yet.
11. What
specifically did the proxy advisers say was the problem with these LTI grants.
The proxy opposition was substantial. Are we going to change the structure?
Answer: not proposing any change.
12. Were you influenced by Dexus which also went for an unnecessary retention plan and suffered a big shareholder backlash. Have any other listed property companies tried something similar?
Answer: not asked as filed it too late.
13. When disclosing the outcome of all resolutions, including this fee cap rise for the NEDs, will the chair agree to publicly disclose how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative recently adopted by Metcash and Southern Cross Media after their AGMs.
Answer: no commitment.
14. Given the interesting discussions across a range of topics today, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website. AGM transcripts have been recently provided by other major companies like ASX, Woolworths, Crown Resorts and AGL and given the retention grant discussion in particular, all shareholders should have access to a full transcript.
Answer: just the webcast.
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