11 questions asked at 2022 Dexus AGM

October 26, 2022

Here is the text of the 11 written questions lodged during the 2022 Dexus hybrid AGM held on October 26, along with a brief summary of the answers with links to some short videos taken on the Iphone from the webcast and published via Twitter.

1. Was the timing of the chairman's retirement at the end of today's AGM influenced by the recent adverse NSW Government report into Star Entertainment, where he was a director for almost a decade? Could both Richard and new chair Warwick Negus comment on what drove the timing of the chair transition.

Answer: No, it was happening anyway as Richard Sheppard is 73 and has been on the Dexus board for a decade. Watch this video of his comments.

2. Did any of the 5 main proxy advisers - ACSI, Ownership Matters, Glass Lewis, ISS and ASA - recommend a vote against any of today's resolutions? Thank you for disclosing the full proxy position to the ASX along with the formal addresses. There was a 24% protest vote against Nicola Roxon's re-election. Which proxy advisers recommended against and what concerns did they raise, which clearly are also shared by multiple institutional investors who voted against. How are we going to respond to this protest vote?

Answer: the chair explained that one proxy adviser recommended against Nicola Roxon because there was a rem strike last year and she sat on the rem committee.

3. Darren Steinberg is one of the longest serving CEOs in the ASX200. Chair succession has now been sorted so no doubt it will come to Warwick Negus to lead the succession process for the CEO role. Could Darren please comment on whether he believes there are multiple viable internal successors and how many more years does he expect to be receiving these LTI grants.

Answer: the chair said there is great talent within to succeed CEO Darren Steinberg but there were no plans at present for him to depart.

4. It is right to do an LTI grant using relative TSR at a time when the share price is trading at a massive $5 billion discount to book value. Isn't the starting point for this incentive artificially low, failing to take into account the plunging share price since April this year?

Answer: Yes, because all listed REITs have been hit since April this year and multiple shareholders approved of the new incentive structure.

5. Thank you to Tonianne Dwyer for her 11 years of service. It is always helpful for investors to have access to some exit perspectives from retiring independent directors. In her final contribution as a well paid Dexus director, could Toni-Anne please comment on what she regards as the best decisions Dexus made during her time on the board and does she have any regrets?

Answer: hiring a great CEO in Darren Steinberg was the best call made by the board. Watch this video of her comments.

6. From 2012-16, I was chair of the City of Melbourne finance committee and was aware that Dexus had a highly favourable lease arrangement on the council-owned car park at the back of the Melbourne Club on Little Collins St. The lease expires in 2026 & the logical play would be a joint development with council & the Melbourne Club. Have any discussions been held as to the post-2026 management & development of this valuable property near Parliament House & the Paris end of Collins Street. Are we likely to be farewelled in 2026?

Answer: the CEO said discussion with council had been going for a few years and would hopefully lead to a good outcome. The chair also pointed out that Dexus is redeveloping 60 Collins St which is adjacent to the Melbourne Club so that has also been discussed with The Melbourne Club.

7. A question for the auditor Matthew Lunn. How could Matthew and his team sign off on the 2021-22 accounts claiming we have net assets of $13.56 billion when the current market capitalisation is only $8.24 billion. Can the auditor or the CEO cite any other ASX200 companies with a $5.3 billion market cap discount to claimed book value. Shouldn't we simply be taking a major write-down to reflect changed valuations after COVID, particularly with office occupancy.

Answer: the auditor gave an interesting response including the usual reliance on the accounting standards - watch video via Twitter.

8. Shareholders rarely get any insight into chair succession matters. Could Mark Ford provide his perspective on how the chair succession was handled. Was a head hunter or external party involved in the process or was it all done just with the assistance of the company secretary, like what happened at Macquarie Group. Were their multiple candidates for chair and was their a ballot. Was Mr Ford a candidate?

Answer: Mark Ford explained that there were multiple candidates, it was handled internally with different people in different rooms at different times and he was unaware if the final vote was unanimous.

9. As chair of HESTA, Nicola Roxon has lent in on ESG engagement, including advocating for more responsible conduct by gambling companies. Could the CEO and Nicola both comment on whether Dexus has a position on gambling. Do we have any pokies venues or TAB outlets in our buildings or are these excluded as a matter of policy. Also, could Nicola detail the size of HESTA's investment in Dexus and indicate if she's aware how that stock is being voted today, including on her own re-election.

Answer: CEO Darren Steinberg explained the pokies exposure is tiny (watch this video via Twitter) whilst Nicola Roxon explained her distance from the HESTA voting call.

10. If the board Rubin truly believes that our net assets are worth $13.56 billion, why doesn't she push for individual asset sales at book value to both prove what they are worth and provide improved returns to shareholders through either on-market buy backs or capital returns using the cash proceeds of these asset sales. The CEO and new chair Warwick Negus are also welcome to comment on this point. Surely a break up of the assets should be looked at.

Answer: CEO said they've sold $1 billion of assets in each of the past 3 years recycling assets and are exploring further assets to fund the development pipeline and potentially generate cash for a buyback.

11. Well done for running a professional hybrid AGM with good production values and no censorship. I appreciated multiple directors contributing to the discussion, along with the auditor. Great work with early disclosure of the proxies to the ASX. Let's also hope the new chair continues the excellent practice of voting outcomes being disclosed including both shares and shareholders. An AGM transcript and webcast archive on the Dexus website would be great too. Good luck in 2022-23.

Answer: wasn't read out.