Historically, Australian shareholders have
had an appalling culture of rarely proposing resolutions
of their own to be voted on. Instead, they’ve tended to accept whatever company resolutions
boards have dished up for approval at the annual general meeting.

When
a resolution does run into trouble, rarely does it actually get
defeated because the company usually withdraws it when the proxies are
running badly. AWB last week joined this very small club when it
withdrew the resolution proposing a $400,000 pay rise for directors.
This is where it fits in the lexicon of defeated or withdrawn
resolutions:

Southern Cross Broadcasting:
Announced the withdrawal of a resolution to increase retirement
benefits for directors at 5.51pm on Friday, October 26, 2001 as you
can see here.

John Fairfax:
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.

AMP:
Withdrew its ludicrously generous and complex incentive schemes
proposals for new CEO Andrew Mohl and Henderson 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.

News Corp:
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 that objected and it must have been some sort of “crazy
misunderstanding.”

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proposal to issue options to executive directors was withdrawn at the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.”

AWB: Withdrew resolution proposing a $400,000 increase in maximum board pay to $1.6 million as you can see here.

I’ll be heading to tomorrow’s AWB AGM in Melbourne as a very recent
shareholder but am not expecting any detailed answers. Executive
chairman Brendan Stewart will no doubt blame the former management and
claim he can’t comment until the Cole Inquiry is over. His planned trip
to Iraq with Mark Vaile will be an interesting topic given the
Canadians have already seemingly cut our lunch.

It will also be amusing to see the spectacle of six farmers running for
four board vacancies. Stewart himself is up for election and as
chairman of both the remuneration and nomination committees, he is
seriously in the gun over the pay rise proposal and the ridiculous
monopoly that wheat farmers have over board seats.

Representative boards are difficult to govern at the best of times and
AWB runs a ridiculous gerrymander which only allows A class
shareholders from the relevant state to vote on each board election. So
much for having an accountant, a lawyer, a marketer, a couple of former
CEOs and a couple of industry experts which is what most good boards
feature.

Peter Fray

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