12 questions asked at 2022 Endeavour Group AGM

October 19, 2022

Here is the text of the 12 written questions lodged at the 2022 Endeavour Group AGM held on August 18, all but one of which were asked, although chair Peter Hearl didn't allow any other director to answer any of them.

1. Victorian law limits hotel operators to 35% of the state's hotel pokies yet The Sunday Age recently reported that the Mathieson family are now up to 42% through Endeavour and Bruce Mathieson senior's daughters, Jodi and Deborah, who are both married to top 10 Victorian hotels pokies operators. Could Bruce junior comment on whether he too is going to personally get into the pokies business, competing with Endeavour & could the chair & CEO comment on how these conflicts & regulatory breaches are managed.

Answer: Chair Peter Hearl didn't invite Bruce junior to comment and just said Mathieson family interests were a matter for them.

2. The 2021-22 Woolworths annual report states that it has 374,275 shareholders, but Endeavour's inaugural annual report in 2020-21 claimed we had 466,897 shareholders. This year it is down to 439,182, a drop of 27,715 or 6%, which includes 133,240 with an unmarketable parcel, down from 140,716 last year. Are we overstating the shareholder figure or is Woolworths understating there's and when are we going to launch a mop up offer to unmarketables as an obvious cost saving measure?

Answer: This is what the share registry tells us and we don't know what Woolworths does.

3. Could Holly Kramer, as the Woolworths nominee on the Endeavour board, comment on whether Woolworths is committed to retaining its 14.6% stake in the company, even after Gordon Cairns retires as Woolworths chair next week. Could she also please comment on the prospects of Woolworths lifting its stake to 15.08%, matching the move by the Mathieson family to lift their original 145.6% stake last year. If the strategy was to match & balance the Mathieson stake, why isn't Woolworths keeping up with them?

Answer: Chair Peter Hearl didn't invite Holly to comment and said this was a matter for Woolworths, which is why I asked their board nominee in the first place.

4. Chairman Peter Hearl is 71 and his current 3 year term expires in October 2024. Is Peter intending to retire at the end of this term and does he believe there are multiple viable chair successors currently on the board? Also, will Endeavour appoint a deputy chair, so it is clear who is to lead the annual performance review of the chair each year and also lead the chair succession process at the appropriate time. Could Joanne Pollard comment on when she believes a deputy chair should be appointed.

Answer: not asked.

5. Why did it take until June this year for Anne Brennan to be formally appointed to the board when her proposed membership was first announced in 2021. Also, as a former director of casino company Star Entertainment, where money laundering was clearly rampant for years, could Anne explain what steps she has taken to assure herself that money laundering is minimised at Endeavour's 300 poker machine venues where gamblers are losing more than $1.5 billion a year.

Answer: She had to quit the Tabcorp board first and that only happened when the lotteries demerger took place in June.

6. When Anne Brennan served on the Tabcorp & Star boards, both publicly disclosed gross gaming revenue, which is standard practice for ASX listed gaming companies. Woolworths CEO Brad Banducci understated pokies revenue when announcing the demerger & Endeavour has fudged it ever since. As audit committee chair, could Anne Brennan please confirm Endeavour's annualised gross gaming revenue is expected to exceed $1.5 billion in calendar 2022. Could the auditor also explain the ongoing failure to disclose.

Answer: Chair said Woolworths is in line with the accounting standards and declares pokies revenue after state gaming taxes.

7. As the new chair of the People & Culture Committee, could Joanne Pollard explain why her predecessor in this important position, Catherine West, quit the Endeavour Group board without explanation after less than a year on the board. Catherine West is still serving on other public company boards such as Nine Entertainment, Peter Warren Automotive & Monash IVF. Why did she quit Endeavour? Did she have a problem being associated with Australia's biggest poker machine operator? Were there cultural concerns?

Answer: Chair unaware of any cultural concerns and just said she was rebalancing her work commitments.

8. Duncan Makeig was the chair of Good Spirits Hospitality until May this year. Wasn't this always a conflict of interest helping a competitor and did he quit to address this conflict of interest. Also, does Duncan still have private interests in NSW pokies venues and, if so, is he also proposing to divest this interest in order to focus exclusively on Endeavour within the broader hospitality sector.

Answer: He's out of NZ, where Endeavour has no venues and he now has a minority interest in two NSW pokies pubs and these were cleared by the board.

9. The annual report lists Duncan Makeig as owning 7,042 shares whilst Joanne Pollard only has 7500. These stakes are worth less than $55,000 yet Duncan was paid $280,000 in cash in 2021-22 and Joanne was paid $245,000. Fund manager John Wylie is currently pushing a plan for Australian NEDs to have much greater skin in the game. Why don't we adopt a formal plan to require our NEDs to hold bigger shareholdings & can Duncan and Joanne explain their investment plans with the stock to get more skin in the game.

Answer: Chair said directors have 5 years to accumulate a year's worth of fees as shares and both these directors are on track.

10. Billionaire pay at public companies ranges between the Packer family commendably never taking any salary to the Murdochs taking more than $1.5 billion since 1999. Why was billionaire heir Bruce Mathieson junior included in the Endeavour incentive scheme and why does the rem report list him as receiving a termination benefit, when he only quit to the join the board. Also why didn't Bruce junior need regulatory approval to be CEO of ALH when he requires this to serve on the Endeavour Group board?

Answer: Bruce junior was paid like any other executive and the regulatory requirements are different for directors when compared with executives.

11. Given the interesting discussions across a range of topics today, including this CEO LTI grant, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website, as commendably occurred after your inaugural AGM last year?

Answer: Yes, we'll do another transcript, just like last year.

12. Best practice is moving with proxy disclosure with companies such as NAB, Afterpay, TPG Telecom and Ausnet lodging the proxies with the ASX along with the formal addresses. Why did we withhold proxy voting disclosure until after the debate on all items today? Will we disclose them to the ASX ahead of next year's AGM and has there been any material protest vote against this proposed LTI grant to the CEO. If so, what issues did the proxy advisers raise?

Answer: No protest votes of note and we'll think about this for next year.