Strikes Against the Remuneration Report – 2018 AGM Season

There has been a significant increase in the number of ASX 300 companies receiving a strike against their remuneration report in the 2018 AGM season, with 19 companies overall receiving strikes compared with six in 2017.

Below is a summary of the disclosed commentary on those companies that received a strike at their recent Annual General Meeting as of mid-December 2018.

 1. National Australian Bank Limited

  •  The company had 88.43% of shareholders voted against the remuneration report. Chairman Ken Henry said to shareholders, “We tried, but we got it wrong. We are listening to you.”
  • Shareholders also voted against CEO Andrew Thorburn’s awarded shares. Ken Henry indicated that shareholders were unhappy that that the bank changed its remuneration scheme.

2. Westpac Bank

  • Shareholders voted 64.16% against the remuneration report. The Chairman Lindsay Maxsted knew that more than half of the votes would go against the remuneration resolution. He said in his opening speech,

“This means we will incur a first strike. This sends a strong message to the board…In assessing short-term variable reward performance, outcomes were below target for economic performance and for customer and service-related areas of the annual scorecard. As a result, this year’s short-term variable reward for the CEO and group executives in Australia were, on average, 25% lower than last year.  The largest individual year-on-year reduction was 50%”.

 3. Mineral Resources Limited

  • 63.63% of shareholders voted against the executive remuneration report. It is the company’s third strike in a row.
  • Last year the company received its second strike, causing a board spill motion. They received a vote of 41.48% against the remuneration report and, in 2016, it was 49.18%.
  • The board spill motion was not carried through due to shareholders voting for the retention of the board and existing management.

4. Karoon Gas Australia Limited

  • Shareholders voted 62.95% against the remuneration report.

 5. Telstra Corporation Limited

  • 61.98% of shareholders voted against the remuneration report. The Chairman, John Mullen, admitted that there is merit with replacing the complex remuneration calculations,

“Maybe there is a case for doing away entirely with all these complex schemes and just go back to a fixed salary commensurate with the difficulty of the role.”

6. Havilah Resources

  • Shareholders voted 60.15% against the remuneration report.

7. Harvey Norman Holdings Limited

  • 50.63% of shareholders overall voted against the remuneration report.
  • This was partly due to the company losing $40.5 million over the failed Coomboona dairy farm acquisition.
  • Additionally, shares in Harvey Norman were up 2.49% to $3.085 at 1415 AEDT on Tuesday, which is 35% lower than the 20-month high of $4.51 in March.

8. NRW Holdings Limited

  • Shareholders voted 49.05% against the remuneration report.

9. Goodman Group

  • The remuneration report was 45.46% voted against by shareholders. The shareholder votes were mostly against the remuneration report and the performance rights issued for their executives.

10. Jupiter Mines Limited

  • 44.84% of shareholders voted against the remuneration report.

11. Tabcorp Holdings Limited

  • Shareholders voted 40.40% against the remuneration report.
  • Shareholders have been concerned with the pay packets of executives, however Chairman Paula Dwyer stated in the meeting that the awards being paid their executives would change due to their merger with Tatts.

12. Myer Holdings Limited

  • 37.54% of shareholders voted against the remuneration report however a potential board spill was prevented as 63% of proxies opposed a spill motion.
  • This is the company’s second strike.
  • In 2017 during their AGM season, the company received 29.41% against their remuneration report.

13. Austal Limited

  • The company had 37.24% of shareholders voted against the remuneration report.
  • The strike was against the shipbuilder’s Board managing director David Singleton’s pay structure.

 14. Australian and New Zealand Banking Group Limited

  • The company received a 33.76% vote against the remuneration report.
  • The Chairman Mr. Gonski told shareholders that the board cut directors’ fees by 20 per cent.
  • He stated it was the “right thing to do given the impact the bank’s failings had on share shareholders this year”.

15. Computershare Limited

  • Shareholders voted 31.89% against the remuneration report. They had voted against the remuneration report over the pay packet of its expat Chief Executive, even though the company gained high record earnings and Computershare’s share price increased.

16. Healthscope Limited

  • The company received 29.29% votes against the remuneration report. Shareholders were against executive pay.

 17. Brickworks Limited

  • Shareholders gave a 28% vote against the remuneration report.

18. Automotive Holdings Group Limited

  • The company received their first strike. Shareholders gave a 27.62% vote against the remuneration report.

19. Emeco Holdings Limited

  • The company received their first strike this year.
  • Shareholders voted 26.03% against the remuneration report.

In addition to the companies above, 17 companies were close to receiving a vote against their remuneration report during this AGM season as they received ‘against’ votes which ranged from 15% to slightly below 25%.

Let Egan Associates help you achieve shareholder approval through benchmarking your organisations’ roles and assessing how competitive your organisation is in its remuneration, incentives, commissions and other pay-based retention strategies.  Call us now on (02) 9225 3225 to speak confidentially with one of our Consultants or email mail@eganrem.com.

 

 

 

 

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