6 questions at 2023 NIB AGM

November 11, 2023

Here is the text of the 6 written questions lodged at the 2023 NIB AGM held in Sydney on November 10, along with a summary of the answers and some video grabs. Only protest vote was 10% against re-election of director Anne Loveridge. Also watch this passionate re-election campaign speech by chair David Gordon. Watch webcast of 100 minute meeting.

Q1. With NIB shares currently at $7.26, the advice from JP Morgan back in 2007 to do a totally unnecessary $50 million placement to its clients at 85c as part of the demutualisation process, was clearly very costly for the then 300,000 NIB customer shareholders. As the only director still around, does CEO Mark Fitzgibbon now acknowledge that pre-demutualisation customers were diluted out of hundreds of millions of dollars of value. Does Mark have any regrets and what ongoing relationship did NIB have with JP Morgan after the 2007 IPO. Are they still our main corporate adviser?

Answer: chair David Gordon gave a solid defence and then CEO Mark Fitzgibbon made the good point that the stock hit a low of 55c after listing, so they didn't sell them too cheaply in their attempt to create post-listing liquidity.

Q2. Why did we only lodge the annual report with the ASX on October 6, when most companies do this at the same time as the full year results are released in August. Will you get with the program next year to give proxy advisers more time to review our remunerations practices? Did any of the proxy advisers recommend against any of today's resolutions, including this remuneration report item. Also, why not disclose the proxy position to the ASX along with the formal addresses, as many companies now do. There is no reason to hold back disclosure of the proxies until during the meeting.

Answer: chair said this was wrong as it was lodged in August. Correct, but it was also re-lodged on October 6 when the notice of meeting was released.

Q3. Could the 2 new directors, Brad and Jill, along with the chair, comment on the recruitment process that led to their appointment to the board. Was a head hunter involved, did the full board interview any other candidates and did either new director know of any of the existing directors before engaging with the recruitment process? What was the recruitment process like for the 2 new directors?

Answer: head hunters were involved and no director knew anyone else beforehand so a good process. Watch video of exchange via Twitter. This needs to happen more with Perth-based companies which still largely run on a who you know system. Also, watch this impressive campaign speech by new director Brad Welsh, an Indigenous man and the CEO of winding down uranium miner ERA.

Q4. When David Gordon was first appointed to the board in 2020, then chairman Steve Crane said it was part of succession planning. Could David clarify if he knew Steve Crane before his appointment to the NIB board and whether they discussed potential chair succession before he joined the board in 2020. At the time of the chair transition in July 2021, what was the internal board process? Was there a contest and a secret ballot? Also, as the relatively new chair, what is David doing in terms of planning CEO succession given that Mark Fitzgibbon has been in the role for the entire 16 year period that NIB has been listed.

Answer: David Gordon cracked a few laughs suggesting I was jumping at shadows. Also, watch the CEO succession response.

Q5. Could the CEO summarise his past LTI grants as to whether they have vested or lapsed. 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 and the CEO could factually summarise the situation in 60 seconds.

Answer: feisty chair started off with this detailed response and then Mark Fitzgibbon chimed in with this contribution. Bottom line if that he's never bought any on market and has sold plenty over the years, normally to pay tax bills.

Q6. Thanks for running a hybrid AGM today. Will the chair commit to continue doing this into the future to maximise shareholder participation, along with publishing a full copy of the webcast online. NIB has around 130,000 shareholders, putting us in the top 20 for shareholder numbers on the ASX. When disclosing the outcome of voting on all resolutions today, 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 was a voluntary disclosure initiative adopted by the likes of Metcash, Altium, AUI, Dexus, Webjet, Tabcorp and Myer over the past two years. The ASX itself did it for the first time this season and Qantas did it last Friday.

Answer: chair declined to lock in a hybrid going forward. Watch video of exchange via Twitter.

Also lobbed this comment at the end which moderator declined to read out but promised to pass onto the board:

Thanks for running a good meeting. Impressed with the answers. We're in good hands under chair David Gordon and CEO Mark Fitzgibbon. Great to see we've added an Indigenous director after the sad defeat of The Voice. The board recruitment processes have been excellent. Good point about NIB shares hitting a low of 55c after the IPO. We were both sort of right on the annual report as you did re-lodge it with the ASX on October 6, but it was also lodged earlier in August. Please go with the hybrid again next year as no one, apart from many directors, wants a boring AGM with little debate.