While results reporting season is a focus this month, the AGMs and general meetings continue, with two notes to cover the range of meetings scheduled to occur this month. The first note available via this link https://subscriber.theexecutiveremunerationreporter.com.au/archives/16864 looks at the AGMs for Aristocrat Leisure and Graincorp briefly, with a more... Show More
Ambertech Limited is one of three companies scheduled to hold a Board spill meeting under the two strikes rule in 2017. All four directors were re-elected at today's EGM, with strong support evident in the proxy votes disclosed to the ASX. Zeus Resources will hold its spill meeting on 8... Show More
First business day back and already the meetings are underway with Centuria Capital's security holders voting this morning to approve the conditional placement underpinning its acquisition of the 360 Capital Group's real estate platform (approved by its security holders on 30 December 2016)...and a unitholder requisitioned EGM to wind up... Show More
A lot of media attention has been taken up with the first strikes occurring in 2016 – AGL Energy, Boral, Carsales.com, Commonwealth Bank of Australia, CSL, Goodman Group, Spark Infrastructure, Woodside Petroleum – yet the suggestion of some kind of shareholder revolt in 2016 merits closer examination. Show More
With the main AGM season out of the way for the 30 June FYEs, several key AGMs occur this month including TPG Telecom, ANZ, NAB, Westpac, DuluxGroup, Incitec Pivot, Orica. Outside All the Majors, December features AGMS for Ten Network Holdings, Cudeco, Elders and Emeco Holdings. This month's note also... Show More
Today's note has the strikes I've spotted in amongst all of the results notices today, plus the outcomes at Bank of Queensland and Northern Star Resources. You'll find today's note at this link and it was written after markets closed today so will be updated on Thursday for any WA... Show More
A few first strikes today at Globe Metals & Mining, Spectrum Rare Earths, TV2U International and Wellard. A second strike at Jervois Mining but, courtesy of last week's shareholder requisitioned EGM, the Board has already been spilled. Today's note can be found at this link https://subscriber.theexecutiveremunerationreporter.com.au/archives/16670 Show More
Aside from Primary Health Care, today's note features smaller AGMs. First strikes at Australian Dairy Farms Group, Fleetwood Corporation, East Energy Resources and Quantum Energy and close at Carnarvon Petroleum. Not for the first time this season, I take a look at the show of hands or poll debate, using... Show More
A fiery AGM day today - and at Jervois Mining shareholders didn't wait until next week's AGM to spill the Board. First strikes at Capitol Health, Carpentaria Exploration and RedHill Education. Second strike and Board Spill resolution passed at Ambertech; a second strike but no Board Spill at Cape Lambert... Show More
First strikes at Keybridge Capital and CMI, second strikes avoided at Webjet and Oilex...plus results for Estia Health, Hill End Gold, McGraths, Energy Technologies, Cash Converters, Global Value Fund and BPH Energy. You'll find today's note at this link https://subscriber.theexecutiveremunerationreporter.com.au/archives/16640 Show More
It's one of the themes and what concerns me is that typically remuneration schemes, being based on underlying results, can simply ignore them.
Since writing this wire, South 32 has announced a non-cash charge of US$1.7 billion on after tax against a number of its assets, including its Australian and South African manganese assets, South Africa energy coal assets. following completion of a review. This charge will be reflect in the 1H16 results, due for release on 25 February 2016.
$1.2 million isn't an issue within the ASX 100 nor probably is $1.8 million (depending on what else is there) but if the rate of growth is high, within 2 years you can more than double fixed remuneration from its FY2015 level. And that becomes an issue.
Thing to remember with fixed pay is that it's paid irrespective of performance for the year, so increasing it annually in line with past performance (because that is what the formula does) also increases the level of STI opportunity (because that's 100% of fixed pay). An alternative might be to keep base modest and up the level of short term incentive opportunity as a percentage of fixed pay. This is the challenge with companies experiencing strong growth.
Taking the second queston: When voting on a show of hands each shareholder present, in person or by proxy, has one vote irrespective of the size of the shareholding. Proxy votes really come into play when a poll is called and there is one vote per ordinary share. A poll would ideally have been called for on this proxy voting position. Why the proxy vote against? I don't cover HHV so I can't say whether there are other issues. A quick look at their 2015 remuneration report indicates non-executive director fees were increased in FY2015 as the Board is trying to phase in increases in line with 'market' data which showed the Board fees were well below the market.
It's a nice example of how a formula in a share plan can create perverse incentives. The One.Performance.Right is issued to other executives as well as the MD/CEO. An issue for another day is why does the company need to give any further shares to an executive KMP who has a shareholding worth nearly $200 million? It's not about motivation or aligning interests: both of these already exist. This isn't just a problem at Seek but at a few of our large listed entities and the premise appears to be to treat these individuals as just another executive (so pay in the same way as any executive in that role) when clearly they aren't.
In answer to the question can they vote the shares they've lent: generally no they cannot vote because they do not own the shares once 'lent'. 'Lending' is a misnomer because ownership or title of the shares is transferred. While the Australian Master Securities Lending Agreement does include a clause for the borrower to use 'best endeavours' to ensure the voting rights attached to borrowed securities are exercised in accordance with the lender's instructions, evidence from ASIC from 2009 (CP107, page 10) indicates this clause is frequently deleted. If your interested in the legal ins and outs of short selling this paper from The Centre for International Finance and Regulation from 2014 http://www.cifr.edu.au/assets/document/WP022-2014%20Ali%20E019%20The%20Legal%20Structure.pdf may be of interest. There are rights specified in the typical lending agreement in relation to calling back shares and the time frames involved. Proxy votes close 48 hours before the AGM and most institutional votes are lodged with 1-2 days of the deadline. Given 26 November AGM and 24 November proxy close-off, they still have time to recall for voting....
Thanks for the feedback Patrick and I'm glad you are finding them useful.