2010 JWS AGM season survey results

Articles Written by John Keeves (Partner), Damian Reichel (Partner)


At the conclusion of the 2010 "AGM Season" we conducted a survey of the business of AGMs.

Our survey for 2010 had three aspects:

  • results of voting on remuneration reports for the Top 100;
  • Australian Shareholder Association's recommendations on remuneration reports; and
  • special business items at AGMs for the Top 50.

No Votes on Remuneration Reports

We surveyed the 2010 AGM results of the ASX Top 100, based on the S&P/ASX 100 Index, in relation to voting results on non-binding remuneration report resolutions.

Of the companies surveyed only 3 (3.6%) had "no" votes of over 50%, a total of 10 (12%) had no votes of over 25%, the proposed threshold for the Government's "two-strikes" board spill proposal (see our December 2010 Remuneration update "Exposure Draft Bill - Executive Remuneration").

Table 1 shows a summary of the "no" vote results.


Of the 10 companies with a 25% or greater "no" vote, we went on and surveyed the "voter turnout" percentage i.e. what percentage of shareholders actually voted on the resolution. Table 2 summarises this data.

* Fewer than 100 companies were included in the survey primarily because some of the members of the index are foreign companies or trusts which are not subject to the requirements of section 250R(2) of the Corporations Act to have a non-binding shareholder vote on the company's remuneration report.


Table 2 therefore shows an average voter turnout of only 56%, meaning that, on average, a 25% no vote could have been achieved by only 14% of the shares on issue in these cases. In the particular case of AGL Energy Ltd, only 11.5% of shareholders actually voted against. These results highlight a reason for some concern with the Government's "two-strikes" proposal based on a 25% "no" vote (see above).

ASA Recommendations

We also collected data on the Australian Shareholders Association (ASA) voting recommendations on remuneration reports.

ASA made a total of 122 recommendations in respect of the group of 200 listed entities that ASA monitors.

Of the 122 recommendations, an overwhelming 106 - or 86% - were against the approval of the remuneration report.

Within our survey group of the Top 100 companies noted above in section 1, ASA made a total of only 54 recommendations. Of these only five were to vote in favour of a remuneration report. This appears to be influenced by an inflexible application of ASA's policy in relation to share based remuneration to individual company's remuneration practices (in particular not meeting ASA's preferred 4 year long term incentive (LTI) scheme period and not having a deferred equity component in the short term incentive scheme).

In only two cases of the 54 where ASA made a negative recommendation was the "no" vote successful.

Special Business Items

We also surveyed 44 entities in the Top 50 (based on the S&P/ASX 50 Index) in relation to special business items at 2010 AGMs.

Ten companies increased their NED fee pool (to $4 million for Woodside and Macquarie), five companies amended their constitutions to deal with the payment of dividends (as a consequence of Corporations Act amendments in 2010) and only two replaced their constitutions entirely (Origin Energy, Telstra).

The most common item of business (26 companies) was approval of grants under LTI schemes; in some cases "voluntary" approvals (AMP, Transurban).

There were only five examples of approvals being sought under the "new" termination payment provisions, largely but not exclusively in connection with approval of grants made under LTI plans.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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