me a cynic, but is Macquarie Bank preparing to bring forward its annual
meeting to avoid being a potential early casualty of the new
non-binding votes on remuneration reports that starts on July 1? We
asked Macquarie’s spinner last week, but the silence has been
deafening. After all, even Peter Costello expressed concern about CEO
Allan Moss collecting $18.5 million in the year to March 30, so there
surely has to be a chance that institutions could send the
Millionaires Factory a message by voting down its remuneration report.

before have the top five executives of an Australian company averaged
as much as $14.5 million each and, lo and behold, this same company
will be fronting up for the first ever Australian non-binding AGM vote
after the law changes. Unless, of course, the Millionaires Factory
suddenly becomes a little more efficient and the AGM can be brought
foward to before June 30.

It was unprecedented for Macquarie to
reveal its annual report on the same day as its annual profit result
last Tuesday. That’s why we got all the salary figures mixed in with
the profit numbers. We simply report the facts and you decide. If you
were Macquarie’s spin doctor, would you advocate a change? This is how
the timing of Macquarie’s annual profit, annual report and AGM has
occurred in previous years:

May 16: annual profit released
June 19: annual report and notice of AGM released
July 25: AGM

May 13: annual profit released
June 24: annual report and notice of AGM released
July 31: AGM

May 18: annual profit released
June 26: annual report and notice of AGM released
July 29: AGM

May 17: profit result and annual report released simultaneously for the first time

Corporate Australia is very nervous the prospect of non-binding votes
on their remuneration reports, particularly in light of what happened
to UK pharmaceuticals giant Glaxo-Smithkline in 2002 when a guaranteed
21 million pound termination benefit to the CEO upset institutions so
much that the overall remuneration report was voted down. This caused
the resignation of two directors and a change in thinking on the CEO’s

Costello noted the Glaxo experience in his press conference unveiling the CLERP 9 changes when he said the following:

The lines of authority run from shareholder to director to
executive, and that’s why we think it important that the directors
still set the remuneration in relation to the employees, but we are
giving an opportunity for a report back to the shareholders and for the
shareholders to vote on the policy. Now, whilst it’s non-binding and
this is the UK position, directors would be well advised to take notice
of their shareholders. And there was a recent case in relation to Smith
Glaxo Kline where a very large salary was referred back to the
shareholders, the shareholders exercised a view in the UK and I think
it was reconsidered.