Egan Associates has analysed votes against the remuneration report at 2015 Annual General Meetings across the top 500 ASX companies by market capitalisation to examine any trends.
The number of company shareholders who voted against the remuneration report is displayed in the table below, split into groups of 100 based on rank:
Where the proportion of votes cast on a poll was reported, they were used to determine whether a strike had occurred. Otherwise proxy voting figures were used. This may lead to a strike being reported in this data where the company did not officially record a strike due to passing the remuneration report on a show of hands. In addition, the number of companies in each group varies based on the availability of information on votes. Some companies have just listed and did not hold an AGM for the 2015 year, while others were not required to submit a remuneration report or did not provide numbers after the vote.
Among the top 300 companies, there was an approximately homogeneous number of strikes over the three company rank bands, although the top 100 companies received a slightly higher number of protest votes than the next two hundred. This potentially shows a greater inclination of investors to express opinions on remuneration. There was divergence in the 300-400 and 400-500 bands, with the former recording more strikes and the latter recording fewer.
The result for the ASX 300-400 could be due to these companies employing remuneration practices and corporate governance reflective of a small company while shareholders believe they have reached sufficient scale to implement practices matching those of the top 300 companies. Alternatively, given companies in the 300-400 group are likely to have different shareholder composition to those in the top 300 companies, it could also represent large shareholders attempting to influence the Board’s strategy or membership.
In the 400-500 group, the smaller scale of the organisations would appear to shield them against shareholder interest in remuneration votes. The level of remuneration in companies of this size is also well below that of the top 300 companies.
In general, the median adverse remuneration report vote is very low, with protests against the remuneration report remaining the exception rather than the rule.