Questions asked at 2021 Lovisa AGM

November 22, 2021

Questions asked at 2021 Lovisa AGM

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? Which of the proxy advisers are covering us and 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: never properly dealt with as proxy disclosure was delayed until after debate.

When disclosing the outcome of all resolutions today, will the chair support the idea of publicly disclosing 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. Rather than the vote being dominated by our billionaire chair, please use this secondary form of voting disclosure as well.

Could the CEO and chair both comment on what steps we have taken to ensure we are complying with Australia's Modern Slavery legislation? From which countries are we most reliant on in terms of accessing fast and affordable jewelery. Are we comfortable that workers in these countries are being paid a fair wage and are not being exploited.

Answer: Out-going CEO just said "we comply".

How much would the Australian tax rate have to reduce by to tempt Brett to move back from the most famous European tax haven, Monaco, to Australia. In what year was Brett last a taxpaying resident in Australia and does the management of his tax affairs in any way influence our dividend or capital management policies.

Answer: Acting chair Jim King protected Blundy from answering this and said was a private matter.

Congratulations to Brett for being, along with Solomon Lew, Australia's most successful retail entrepreneur with multiple successful plays including Sanity, Bras & Things, Accent Group and now Lovissa. Is Lovissa his proudest and most successful play of all and what is the average purchase price for his 41% stake which is now worth around $1 billion with the stock at $22.07, even after today's 3.3% fall.

This is one of the most generous incentive grants we've ever seen offered to the CEO of an ASX listed company. It's a private equity style arrangement where Victor could potentially make around $70 million, equivalent to almost 3% of the company. Could Victor comment on whether this arrangement is comparable to pay deals he has had elsewhere and do both he and the chair agree that having an EBIT hurdle creative an incentive for big debt-funded acquisitions?

Could the new CEO please at least sing for his supper by making a few comments. Was a head hunter involved in his recruitment and what was it like negotiating with Brett?

Answer: never asked.

What are the proxies on the rem report please?

Answer: these weren't displayed until the debate and it showed a rem strike.

We just suffered a first strike on the rem report. Could the chair comment on whether he voted on that item and why the proxy position wasn't disclosed before the debate. Could Jim and Brett comment on why the strike happened and what they will do about it?

Brett is a Monaco-based billionaire who owns $1 billion worth of Lovisa shares. Did he really need to claim $19 billion worth JobKeeper when our business is booming. Did the board seriously debate repaying some of this Jobkeeper like other retailers such as Super Retail, Harvey Norman and Premier Investments. Can Brett comment on his thoughts about Jobkeeper.

Given the interesting discussions across a range of topics today, including the LTI grant, could the chair undertake to make an archived copy of the webcast plus a full transcript available on the company's website. Nine Entertainment chair Peter Costello, who appreciates the benefit of a parliamentary hansard transcript where MPs don't have to scroll through old videos to find out what was said, made this change earlier this month & had a full transcript of Nine's AGM online before the end of the day. Can we match that time?

Did any of the proxy advisers recommend against this item and, if so, what problems were raised?

Rather than getting minority shareholders to help pay for this massive incentive grant, did Brett consider offering Victor 2-3% of his own stake in the company. Also, can Brett please comment on the first strike on the remuneration report and does he agree we will probably suffer a second strike and a board spill vote next year, unless this structure is amended.

Answer: Blundy objected to the term "minority shareholders" and declined to answer the question.

Have we been hit hard by the great resignation and are we going to need to lift our wages to retain and attract staff. What percentage of our workers are unionised and do we have a certified enterprise agreement covering our Australian operations?

Answer: question was never asked.