12 questions asked at 2023 Iluka Resources AGM

May 10, 2023

Here is the text of the 12 written questions asked at the 2023 Iluka Resources hybrid AGM held on May 10, along with a summary of the answers provided. There was no censorship at what was a well run 110 minute meeting.

1. 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? Which of the proxy advisers are covering us and have there been any material proxy protest vote? Will you disclose the proxy votes before the debate on each resolution so shareholders can ask questions about the reasons if there have been any protest votes? Also, why not disclose the proxies to the ASX with the formal addresses like others now do?

Answer: chair said proxy advice was private. Turns out there were no material protest votes. Chair said would keep an eye on market practice re early disclosure but this can be disrespectful for shareholders attending the meeting. Yes, but most won't even know.

2. How much are we currently paying to the WA Government in royalties and what is the formula? Is there a risk that the WA Government could emulate the recent Queensland Government move to dramatically increase the royalty rate for coal miners?

Answer: CEO said we paid $46 million last year and a royalty rise was "low risk".

3. The history of demergers in Australia is that one of the companies normally gets taken over within a couple of years. Does the chair believe the demerger has added a takeover premium to our shares and who are our biggest competitors and likely predators. Could any of them bid for us or does the CEO believe we are critical to Australia and a foreign takeover would be difficult to achieve politically.

Answer: no names or rivals provided but chair later said Iluka is the world's pre-eminent mineral sands company.

4. There aren't many former partners of top tier corporate law firms (in this case Freehills) who transition to become CEOs of public companies and then move on to become a public company chair, like Rob Cole has done. Could Susie Corlett comment on the new chair's leadership style. Is it overly legalistic or was the box ticking, risk adverse tendencies of many lawyers drummed out of him during his time as a senior executive and CEO at Woodside and Beach Energy. Rob's comments would also be welcome.

Answer: plenty of laughs in the room on this one. Susie said the chair was excellent and the chair said Don Voelte drummed his lawyerly instincts out of him at Woodside and he hadn't been a lawyer for 18 years.

5. Iluka has a market cap of almost $5 billion but only has 6 non executive directors. Is this big enough and please comment on the geographic diversity of the board in terms of where directors are based. Is this a Perth-dominated board?

Answer: chair corrected and said only 5 NEDs but they are looking to add, potentially with an international perspective. Only the chair and Andrea are Perth-based with the other 3 in Melbourne, Sydney and Brisbane respectively.

6. Unlike the executive team, the average length of tenure for Iluka directors is relatively short. Does Lynne believe the NEDs have enough corporate history to ask penetrating questions of the long serving executive team and do we have tenure limits for directors such that our longest serving director, Marcelos Bastos, won't be seeking re-election when his current term expires?

Answer: chair gave a generally supportive comment about Marcelos (who joined in 2014) but did not acknowledge market practice with tenure limits of around 9-10 years.

7. Given the interesting discussions across a range of topics today, including this incentive grant for the CEO, could the new chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? I asked this last year and the former chair said he couldn't see a reason why not and then it never happened. Iluka has around 23,000 shareholders and less than 100 are watching this live. Please provide a full record of the AGM debate, not just the formal addresses.

Answer: chair was aware of exchange last year and made no commitment but would follow market practice. C'mon, this is now pretty standard.

8. Iluka has a long term CEO and many of the senior executive team have also spent many years at the company. Could the chair of the remuneration committee comment as to whether there are features of the remuneration arrangements at Iluka which have led to such unusual stability in the executive leadership team. Are we overpaying to the extent that people rarely leave or is there something about the culture at Iluka which makes it an attractive place to work?

Answer: as the world's pre-eminent minerals sands company, the chair said this made Iluka attractive. Rem chair downplayed over-paying and said good culture was hopefully a factor in strong retention rates.

9. When disclosing the outcome of voting on all resolutions today, including this LTI grant for the CEO, could you please advise the ASX 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 is a voluntary disclosure initiative adopted by the likes of Metcash, Altium, Dexus, Myer and Tabcorp at recent AGMs. Sure, it's not the law, but could our lawyer chair go above and beyond the legal requirements in the interests of good disclosure and to show respect for retail shareholders. You have the data, please share it.

Answer: lawyer chair made no promises on this front but said would monitor market practice.

10. Well done on getting a 96% mandate on the rem report. That's very re-assuring. Whilst not material, there was a 6% protest against Susie Corlett's election and it is unusual for a director to be less popular than the rem report. Is the chair aware of what the issue was on the director elections. Is it workload related?

Answer: excellent answer on this one as the chair shared that one institutional shareholder voted against members of the sustainability committee because Iluka had not set a carbon reduction target.

11. Could the CEO summarise his past LTI grants as to whether they have vested or lapsed during his 7 years in the role. Also, has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company? Please don't say look it up in the annual report and through ASX announcements. It's complicated over many years and the CEO could factually summarise the situation in 60 seconds.

Answer: Chair was tempted to go with "look it up in the annual report" but then invited CEO Tom O'Leary to speak and he said it was 6 years not 7 and that he had never sold a share but might have to given the tax liability when shares vest. He said quite a few lapsed early in his term when there were write-downs.

12. Final comment of the day and not relevant to this item but you don't offer "general questions" in the drop down box, which is best practice. Thanks for running an inclusive hybrid AGM with no censorship of online questions. Feel free to ditch the telephone questions option next year as that is rarely used. Have been impressed from afar with the board and CEO so keep up the good work. An AGM transcript and the additional voting data with the results would be a nice cherry on top on a good AGM cake. Have a good day.

Answer: chair said general questions could be asked during item 1 which was called "financial reports". Yes, but what if you want to ask about something such as how they meeting was run. This is why you need a "final general questions" session at the end.