10 questions asked at 2023 Invocare AGM

May 27, 2023

Here is the text of the 10 online written questions lodged at the 2023 Invocare hybrid AGM held on May 26, only half of which were asked. The meeting lasted 126 minutes with plenty of takeover heat from the floor.

1. Private equity is well known for doing sale and leasebacks of property holdings after takeovers to turbo charge returns through financial engineering. Have we historically optimised the value of our $500m+ property holdings and how many of our facilities are leased as opposed to owned?

Answer: CEO said they tend to own cemeteries and mortuaries but lease around 60% of their funeral homes. Listen to audio via Twitter.

2. If we're likely to agreed to a takeover, why are we proceeding with this LTI grant to the CEO? Isn't there a conflict of interest with the CEO in relation to the takeover proposal given that a change of control normally triggers full vesting of LTI grants. How are the non executive independent directors with no LTIs handling this conflict?

Answer: not asked, but protest vote was only 7% on this item so it looks appropriate.

3. Who are the biggest private operators globally in the cemeteries and crematoria industry and have there been many international examples of private equity firms getting into the business? Are there many jurisdictions like Victoria, where cemeteries and crematoria effectively remain a legislated public sector monopoly? Have we had many discussions with the Victorian government to free up the Victorian market to private operators.

Answer: CEO explained that private equity is involved in Europe and in Australia Victoria and WA both still ban private ownership of cemeteries. Listen to audio via Twitter.

4. Who are the largest institutional investors remaining on the Invocare share register and have any of them expressed reservations about the proposed TPG takeover price? Private equity firms sometimes offer hold-out institutions an opportunity to roll over into their bid vehicle. If this is proposed, will the board lobby for the same opportunity to be provided to retail shareholders wishing to retain their exposure to this business?

Answer: not asked.

5. 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, including this rem report item? Which of the proxy advisers are covering us and have there been any material proxy protest votes? 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?

Answer: Rem committee chair Kim Anderson read the question and then said no protest votes before the proxies later showed an 8% protest vote, which remains unexplained. Listen to audio via Twitter.

6. Given the interesting discussions across a range of topics today, could the chair and candidate Kim Anderson undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? The likes of Nine, AGL, ASX, ANZ, Domino's and Lend Lease all produced their 1st AGM transcripts in 2021. Will you follow suit today? This is something IAG has been doing since 2003.

Answer: not asked.

7. Kim, there was an 8% proxy protest vote against the rem report. You should have disclosed this before the debate. What caused this and who voted against if all the proxy advisers recommended in favour. It's not a secret ballot. You know who voted against so please disclose who did this and why?

Answer: tried asking this later when Kim Anderson was up for election but it was ignored.

8. Has TPG voted its 20% stake in favour of the directors by proxy or are they in the room or online and intending to vote today? Alternatively, are they not voting at all given the sensitivities around the takeover recommendations of directors.

Answer: not asked.

9. Chairman, you spent almost 5 years as a partner of private equity firm Bain & Co. Based on that experience, what do you think about the way the private equity industry operates? In your view, do you believe they out-perform by being relatively ruthless away from the public eye and also by giving senior management big incentives to deliver strong financial returns. Is this culture suitable for an industry like ours?

Answer: the acting chair at first said there were no online questions on the chair's re-election when there were. On resuming the chair, Bart Vogel then went out of his way to say there was a question that was wrong because he never worked for a private equity firm as his involvement was with Bain & Co, the management consultant. Given so many online questions were ignored, wouldn't it have made sense to just ignore this one if it was based on a factual error?

10. There was a 10.27% protest vote against the chairman on the proxies. Has there been a similar protest vote against Kim Anderson and does this reflect some underlying institutional concern about the recommendation in favour of TPG's bid. Who is protesting across these rem and board elections?

Answer: not asked.