Australian shareholders have
historically had an appalling culture of rarely proposing resolutions
of their own to be voted on, while accepting whatever company resolutions
boards dish up for approval at the annual general meeting.
But could the times be changing? We’ve now had two companies perform backflips in the current
AGM season. Amcor yesterday wilted over the options package for new CEO
Ken McKenzie, as you can see here, and Consolidated Minerals withdrew a resolution to issue sign on and incentive shares to Michael Kiernan, as you can see here.
Both companies were facing the prospect of the specific resolution being voted down as well as the entire remuneration report.
Similarly, companies that still run accruing retirement benefit
schemes for directors are also facing a large protest vote against
their remuneration reports. These include the likes of Gunns, Paperlinx
and Simsmetal. If anyone can name other companies still running the
good behaviour bond lurk (stay around for a certain number of years and
we’ll give you a big lump sum farewell), drop us a line at
[email protected] – it’ll make a good list.
Here is the paltry list of other resolutions that have been withdrawn or defeated over the years:
Southern Cross Broadcasting:
Announced the withdrawal of a resolution to increase retirement
benefits for directors at 5.51pm on a Friday, October 26 2001 – as you
can see here.
Withdrew a proposed change to its constitution regarding proportional
takeovers in 2001, but the losing proxy count was still released here. It was a special resolution requiring 75% approval and Fairfax only had 64.5% of the proxies in favour.
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Withdrew its ludicrously generous and complex incentive schemes
proposals for new CEO Andrew Mohl and current HHG CEO Roger Yates
before the 2003 AGM after angry shareholders vowed to vote them down
given the billions that had just been lost in the UK. Check out the
backdown announcement here.
I still think the rejection of Rupert’s proposed options issue without
performance hurdles for six executive directors at the 2003 AGM was the
trigger for the move to America. The Sun King said it was Australian
institutions who objected and it must have been some sort of “crazy
Hills Motorway: John Cassidy resigned
from the board one day before facing a re-election ballot at the 2004
AGM because it was clear the proxies were running against him. This is
the only time in recent history than an endorsed incumbent director has
been booted off a board.
Fleetwood Corporation: A
proposal to issue options to executive directors was withdrawn at the
2004 AGM due to opposition from shareholders, although the company
blamed “the inadvertent omission of some technical information required
by the ASX.”