Insights from Annual General Meetings held in 2016 Australia...Australia, giving us access to more...

INTELLIGENCE REPORT

Insights from Annual General Meetings held in 2016

AustraliaAPRIL 2017

Report content

Executive Summary 2

Highlights – AGM Season 2016 4

AGM Activity 5

AGM Outcomes 13

Perspectives: 2016 AGM Season 18

Snapshots 27

AGM Ahead 30

AGM Assist 38

Reporting methodology:

The data contained in this report is based solely on Computershare’s client

meetings except for certain poll information, executive remuneration and

strike details, which are based on data published by the ‘Australian Financial

Review’ or any other data where a specific source is named.

> Intelligence Report: Insights from company AGMs held in 20163

Last year, we registered over 24,000 attendees and managed almost 750 Annual General Meetings in Australia, giving us access to more meeting data than any other organisation globally.

Whilst the topic of securityholder dissent has been

consistently profiled across Australian media outlets, it is

interesting to note this theme is not just locally specific,

companies are facing challenging AGM scenarios around

the world. Well-known companies in the United Kingdom,

Hong Kong and Germany experienced highly contentious

AGMs with a number of high profile vote-downs taking

place in 2016. We look at these countries and their AGMs

in greater detail in the report. We have also included a

section on global trends in virtual meeting technology.

Virtual meetings are becoming increasingly more topical

as companies foray into new digital options to increase

engagement and decrease meeting costs.

Securityholder attendance at AGMs in 2016 remained

fairly consistent from the previous year with 0.16% of

securityholders attending. The biggest change in activity

occurred from smaller companies, those sitting outside the

ASX300, where we witnessed a 17% increase in attendance.

In this particular segment, the increased activity also

extended to voting trends, where we saw a 20% jump in

securityholders voting issued capital.

Across all companies, issued capital voted by

securityholders at AGMs increased to 56.3% - the highest

percentage we have seen voted in over five years.

Only 4.2% of securityholders voted at AGMs in 2016, a

marginal decrease from the year before, and contrary to

the 8-10% decrease per year we have seen from 2011. It

will be interesting to note whether the media spotlight on

AGMs in 2016 influences voting uptake in 2017.

Online voting continues to grow in popularity – with almost

34% of all votes being lodged this way. Online voting has

increased by 68% in five years.

For the first time, our AGM report features a dedicated

snapshot of activity within the ASX50 and ASX300

indices, plus companies sitting outside the ASX300. These

snapshots give you the chance to benchmark your own

voting and attendance trends against that of your peers.

We are proud to deliver you our Intelligence Report for

2016, an extension of our ongoing committment to provide

market-leading AGM services in 2017 and beyond.

Regards,

Greg Dooley,

Managing Director, Computershare Investor Services

Executive SummaryWelcome to Computershare’s annual Intelligence Report,

focussing on the outcomes of 2016’s Annual General

Meeting (AGM) season. Last year, we registered over

24,000 attendees and managed almost 750 AGMs in

Australia, giving us access to more meeting data than any

other organisation globally. Our report is the world’s most

in-depth analysis of AGM activity - combining detailed

voting and attendance outcomes with broad industry

trends.

Our report will provide you unique insights into the

behaviour of securityholders, and identify opportunities for

change within your own AGM strategy.

2016 was marked by increased scrutiny on Executive

Remuneration at AGMs, spurred by unprecedented strike

activity in the ASX50 segment. It was the first year

any company in the ASX50 had a strike against their

Remuneration Report, and it happened five times over.

Transparency, non- financial measures and the perceived

appropriateness of Long Term Incentives and Short Term

Incentives proved common themes of discontent between

proxy advisors, securityholders and company boards.

To support our data and insight on strike activity, we are

delighted to feature expert commentary on remuneration

strategies to help companies prepare for 2017’s meeting

season. This includes perspectives relevant to both retail

and institutional securityholders.

Greg Dooley


10% decline over the past five

years

13%increase in 2016

First time an ASX50 receives

a strike!

24% decline over the past five

years

67% increase over the past five

years

10%increasein 2016

15%increasein 2016

5 x ASX50

companies received a first strike


3.7 Million

Client emailBroadcasts delivered

17 x ASX300

Did you attend an

AGM?

securityholder

securityholder

securityholderwho voted

Did you vote?

Did you voteonline?

no

0.16%yes

no

4.2%yes

no

34.9%yes

56.3%issued capital

voted

Attendance trendsSecurityholder attendance at AGMs remained consistent

in 2016 at 0.16%. Over the past five years there has been

a 10% decline in attendance. This has been a gradual

and slow decrease, a reflection of general securityholder

disengagement with the AGM format.

Over a five year period, attendance trends have played out

slightly differently across the various ASX segments. For

companies in the ASX50 the attendance trends have been

fairly consistent, however companies within the ASX300

index have seen a 14% decrease in attendance over a five

year period. It is this ‘middle’ segment that is driving a

decrease in overall attendance results.

After year on year decreases, companies sitting outside

the ASX300 index saw an increase in attendance for the

first time in 5 years. In fact, attendance in this segment

increased by 17% to reach 0.4%.

Last minute resolution changes and an increased focus on

executive remuneration placed many of Australia’s largest

companies in the spotlight over the 2016 meeting season.

It will be interesting to observe whether this sparks enough

securityholder interest in 2017 to impact on attendance

trends – especially across the ASX300 index.

% of securityholders attending - AGMs

Highlights - AGM Season 2016

201620152014201320122011

0.18% 0.17% 0.17% 0.17% 0.16% 0.16%

AGM Activity

Wesfarmers held the largest AGM in 2016, attracting 1,333 attendees. They have consistently hosted over 1,000 attendees over the past three years.

Their AGM is a well-known event in Western Australia and includes entertainment, giveaways and gift bags.

Attendance at the Wesfarmers AGM is 150% higher than other clients in the ASX50.

0.16% of securityholders attended an AGM in 2016.


Voting trends Digital advances, and a substantial spike in basic postage

costs early in the year, resulted in a 15% increase in

meetings offering online voting in 2016. For the first time,

we observed over 70% of all client AGMs utilising our

online voting portal - InvestorVote – with 100% uptake by

our clients in the ASX50.

However, increased accessibility wasn’t enough to sustain

an increase in votes overall. In 2016, the number of

securityholders voting decreased to a record low of 4.2%.

Interestingly, 2016 also marked the first time in 5 years that

voting didn’t decrease significantly from the year before. A

five year analysis illustrates the average yearly decrease at

between 8- 10% per annum, culminating in a 24% decrease

since 2012 . In 2016, the number of of securityholders

voting moved only marginally since 2015, from 4.3% to

4.2%.

In 2016, the downward trend in voting was driven

predominantly by clients in the ASX300. Within the ASX50

segment, voting plateaued for the first time in 5 years, with

around 3.8% of securityholders continuing to vote. This

parallels with the flat-lining of attendance trends in the

ASX50.

% of voting securityholders- AGMsWho attends AGMs?Attendance at AGMs can be broken down by

securityholders, proxy holders and visitors. Visitors include

advisors, media, staff who aren’t securityholders and other

interested parties.

In 2016, securityholders represented 58% of total

attendees. Just over a third of attendees were visitors-

37.2%, and the remaining 4.8% were proxy holders.

The breakdown of attendees has not shifted significantly

over the past 5 years, however there has been a slight tilt

in the balance - with securityholder attendance increasing

marginally and visitor attendance slowly decreasing. There

are some instances where our clients do not allow visitor

attendance at all, unless by exception.

Proxy holder attendance decreased gradually over the 4

years prior to 2016 but saw a 5% increase in 2016 across

all indices. This change was more pronounced in our 20

largest clients, where proxy attendance increased by 15%

in 2016. With proxy accountability on voting outcomes

becoming more topical in Australia, their presence (and not

just their vote) may start to receive more attention in 2017.

Breakdown of attendees - AGMS

20162015201420132012

5.5%5.1% 4.8%

4.3% 4.2%

0% 20% 40% 60% 80% 100%

2016

2015

2014

2013

2012

Securityholders Visitors Proxy Holders

56.8 38.00 5.3

56.0 39 5.0

56.0 39.0 5.0

57.5 38.0 4.5

58.0 37.2 4.8

4.2% of securityholders voted at an AGM in 2016

9 > Intelligence Report: Insights from company AGMs held in 20168

Votes by channel Traditional vs onlineOnline voting (desktop and mobile) increased by 10% in

2016 due to 34.4% of securityholders who voted doing so

online in 2016. This marks a 68% increase since 2012.

Over a five year period, the ratio of securityholders lodging

a vote the traditional way (paper or fax) has decreased

from 79.0% to 65.1% - a decrease of 17.5%. Having two

thirds of votes lodged the traditional way is a reflection

of the higher proportion of senior securityholders who

engage with AGMs, and their preference in casting a vote.

Since 2012, we have seen consistent usage of our

intermediary platform - Intermediary Online (IMO).

Overall, the percentage of voting securityholders using

desktop and mobile voting continues to grow yearly.

InvestorVote Mobile accounted for 4% of total voting

securityholders in 2016, this is an incredible 900% increase

since 2012 when this figure was only 0.4%.

We expect a gradual increase in securityholders using

mobile channels to vote, due to two key drivers - the

advent of virtual AGM applications, and a change in the

demographic of securityholders voting to include tech-

savvy Millennials.

Securityholders who voted by channel - AGMs

Securityholders who voted online - AGMs

0% 20% 40% 60% 80% 100%

2016

2015

2014

2013

2012 98.2 1.8

93.1 6.9

90.7 9.3

89.4 10.6

88.3 11.7

Desktop Mobile

Over-voting in 2016Whilst all of our ASX50 clients offer InvestorVote, 70% of

their votes in 2016 were lodged the traditional paper based

way. This is predominantly due to third parties lodging

votes on behalf of institutional investors and custodians.

This raises a number of issues, with over-voting being key.

Over-voting occurs when more securities are instructed to

be voted than the actual number of securities owned by a

registered securityholder.

In 2016 we recorded 54 cases of over-voting across 37

issuers. This impacted 45% of our ASX50 clients and 33%

of our ASX300 clients. Only 0.5% of companies sitting

outside the ASX300 were affected.

A significant effort is made to follow up and rectify over-

vote positions with the lodging party prior to providing final

proxy vote figures. In 2016, almost all over-vote positions

were resolved. A security holding which remains in an

unresolved over-vote position is excluded from the vote

count- no matter the number of votes exceeding the total

voting entitlement.

If an over-vote position remains unresolved at pre-meeting

voting close off, the affected custodian still has the

opportunity to appoint a corporate representative to attend

the meeting and cast the eligible votes.

An analysis of the over-vote register has highlighted:

> 3 instances where the value of shares voted which had

the potential of not being included in the vote count,

represented a value in excess of 10 billion dollars

> 6 instances where more than 50 million votes would not

have been included in the vote tabulation if the over-

vote was not rectified

> 1 instance where an over-vote of 2,000 shares could

have had an impact of rejecting almost 2.7 million

shares from the vote count worth over 23 million dollars

> For a particular meeting the unresolved over-vote would

have excluded more than 4.80% of the voted capital.

Computershare is the only share registry to offer an online

service specifically designed for the needs of institutional

investors - Intermediary Online. For the last seven years

this digital channel has enabled custodians and nominees

to swiftly lodge proxy votes electronically, ensuring

straight-through processing. This unique technology

combats over-voting by providing a series of alerts when a

lodged vote causes a securityholding to move into an over-

vote position.

Across the 54 over-vote cases, only four related to

Intermediary Online clients. The remaining fifty instances

were all paper based - with the majority lodged by

Broadridge. The analysis indicates that by using an

electronic system with alerts to capture votes, there is

a very high success rate in reducing over-vote positions

versus lodging proxies in traditional paper form.

0% 20% 40% 60% 80% 100%

2016

2015

2014

2013

2012

InvestorVote desktop Intermediary Online

Traditional InvestorVote mobile

20.1 0.4 79.0

20.6 0.5 77.4

22.6 0.5 74.5

0.4

1.5

2.3

27.6 0.5 68.4 3.3

30.4 0.4 65.1 4.0


Polling preferences Using a poll instead of a show of hands to determine the

passing of a resolution is considered best practice and

alleviates a number of administrative issues. It provides

both company and securityholder greater transparency

and integrity over votes and resolutions. This is especially

important for smaller companies with the increase in strike

activity over the 2016 AGM season.

In 2016, we saw an 8% increase in poll usage across the

board. This was most pronounced in companies outside

the ASX300 where there was a 30% increase in poll usage.

Clients in the ASX50 recorded their highest poll usage to

date at 96.6%.

There has been an increased emphasis in moving away

from using show of hands by key securityholder and

governance associations, who recommend polls as best

governance. A poll allows securityholders the right to

vote in proportion to the economic interest they hold in

the company, that is, one vote for each share they own.

This impacts institutional investors who hold significant

securityholdings on behalf of their beneficiaries and vote

via proxy as they cannot attend an AGM. Polling ensures all

votes cast by attending and non-attending securityholders

contribute toward the vote held at the meeting.

We expect to see an increased use of polls in 2017,

especially within the ASX300 as they employ best practice

governance post a controversial AGM season in 2016. The

uptake of virtual hybrid AGMs will also impact on clients

using a poll as a default mechanism.

Poll usage vs show of hands - AGMsVoting trends Issued capital Issued capital voted continued to rise in 2016. Across all

AGMs, issued capital voted by securityholders was 56.3%.

This marked the first time that securityholders of ASX50

and ASX300 clients voted over 61% of issued capital.

The largest jump in issued capital voted came from

companies sitting outside the ASX300 where we recorded

a 20% increase on the previous year. This is the steepest

increase we have seen for a number of years, resulting in a

total of 54.3% issued capital voted by securityholders.

Issued capital by channel Issued capital voted by ASX Index - AGMs

In 2016 we saw a marked increase in the use of

InvestorVote to vote issued capital. While InvestorVote

(desktop) has traditionally accounted for between 11% and

17% of issued capital voted, in 2016 it jumped to 23.3% - a

50% increase on 2015. This trend was also reflected in

InvestorVote mobile where uptake increased by over 50%

in 2016. This is driven by the increased online activity of

companies outside the ASX300 where there is a reduced

level of institutional holding and issued capital is voted by

cornerstone investors, founders and executives.

A result that went against a multi-year trend was the fall

in issued capital being voted via Intermediary Online. This

dropped from 46.2% to 27.5% due to a large custodian (JP

Morgan) outsourcing their voting to Broadridge who lodge

votes via facsimile. Broadridge is responsible for 90% of

overvotes, increasing exposure to operational risk for both

custodian and investors.

Issued capital voted by channel - AGMs

0 20 40 60 80 100

All Companies '16

All Companies '15

Outside ASX300 '16

Outside ASX300 '15

ASX300 '16

ASX300 '15

ASX50 '16

ASX50 '15 9.4

3.4

39.7

90.6

96.6

60.3

33.6

82.4 17.6

77.2 22.8

66.4 33.6

63.7 36.3

66.4

Show of Hands Poll

30%

40%

50%

60%

70%

20162015201420132012

47.449.5

47.3 54.3

40.243.1 42.3

56.3

49.2

61.0 60.9

58.361.4

60.0

57.960.7

59.361.5

59.3

45.2

ASX50 ASX300 Other Overall

Securityholders voted 56.3% issued capital

0% 20% 40% 60% 80% 100%

2016

2015

2014

2013

2012 11.3 23.3 65.4

14.8 23.8 61.1

17.4 32.8 49.1 0.7

0.716.7 46.2 36.3

23.3 27.5 48.2 1.1

0.0

0.3

InvestorVote desktop Intermediary Online

Traditional InvestorVote mobile


Plan participant voting trendsCompanies who use Computershare to administer their

employee equity plans have the unique opportunity to

capture insights into their employee’s voting intentions.

This can help companies to structure their internal

communications and voting channels to enhance meeting

activity.

Whilst our research indicates a third of employees check

their company share price daily, this engagement is not

reflected in plan participant voting trends, which have

stagnated back to 2.1%, after a spike in 2015.

% of voting plan participants vs % voting securityholders - all meetings

Our research shows that 6.1% of issued capital held in

employee trust plans received voting instructions from plan

participants, down slightly from 2015, but a higher than

average response. This is in line with the growth in issued

capital voted across the ASX300, the indice in which most

plan participants sit.

% issued capital voted by plan participants vs % issued capital voted by securityholders- all meetings

For more insight into employee share plans, read our latest intelligence report on plan trends here

Strikes 2016 was a significant year for strikes at AGMs. Not only

was it the first year that any company in the ASX50

received a strike since the rule was introduced in 2011,

there were five instances within the ASX50 group.

Within the ASX300 there was also a 13% increase on first

strikes from the previous year, with 17 first strikes recorded.

The number of strikes received within the ASX300 segment

has grown yearly since 2014.

2016 also saw one second strike recorded against an

ASX300 company.

The strike debateIncreased strike activity in the ASX50 and ASX300 signals

an extraordinary change in the climate of Australian

AGMs. The Commonwealth Bank vote-down opened a

flood of commentary from CEOs and Directors about the

roles and responsibilities of proxy advisors, questioning

their methodology and expertise. CEOs publicly enquired

whether institutional investors were challenging, or simply

following the position of proxy advisors.

Key proxy advisors, however, have used the opportunity

to draw attention to issues around governance, board

diversity, and remuneration – especially STIs, LTIs and

bonuses. They argued that Boards are out of touch with

institutional investors, and are missing opportunities to

engage with them.

Companies who recorded their first strike in 2016 will

now need to prepare and address issues raised by

securityholders on their Remuneration Report. This is done

by engaging in discussions with proxy advisors and large

institutional holders on their Remuneration Report policies

to avoid a second strike and a possible Spill meeting in

2017.

When measured - the increased focus on Remuneration in the ASX50 is undeniably growing.

In 2016, the average percentage of votes against a Remuneration report in the ASX50 was 8.5%.

This is 34% increase on 2015 (6.3%), and a 98% increase on 2014 (4.5%).

0%

1%

2%

3%

4%

5%

6%

2016201520142013

EPP Shareholders

5.3 5.31.9 2.1 4.63.2 4.72.1

0%

10%

20%

30%

40%

50%

60%

2016201520142013

EPP Shareholders

45.3 45.43.7 3.2

487.1 54.16.1

AGM Outcomes

The use of online voting – both desktop and mobile – is significantly higher in equity plan participants (93.7%) compared to all securityholders (34.4%).

https://www.computershare.com/au/Pages/Employee-Share-Plan-Trends-December-2016-Report.aspx


COMPANYFINAL VOTE

AGAINST REPORT

KEY REASONS FOR STRIKEBREAKDOWN OF FINAL POSITION

SPO SPOTLESS GROUP HOLDINGS LIMITED 36.15% Quantum of CEO Rem

Increases to CEO Bonus

Alterations to LTI grants

25%-50% (13 Companies)

SKI SPARK INFRASTRUCTURE GROUP 34.43% Remuneration and performance

Activist activity to stop company taking a stake in Transgrid

SGM SIMS METAL MANAGEMENT LIMITED 31.70% Exec Rem

LTI

MTS METCASH LIMITED 29.78% CEO rem increase despite poor company performance

BAL BELLAMY’S AUSTRALIA LIMITED 27.79% Poor disclosure of STI & LTI performance conditions

Fixed rem increases

WPL WOODSIDE PETROLEUM LIMITED 27.59% Level of incentive payouts/ bonus payouts after company reported a profit decline

BLD BORAL LIMITED 26.13% One-off retention payments

CEO non-monetary benefits

Company use of EBIT

Fair value rather than face value for allocation of LTI equity

CSL CSL LIMITED 26.02% CEO pay

Grants of Equity without performance hurdles

Effects of buybacks on TSR performance conditions

** This data has been collected through publicly available information. Some select information has been sourced from Remuneration Report Strikes - 2016 Round-up published by Egan Associates.

Strike summary** The table below shows the end vote results for companies in the ASX300, and provides an overview of reported reasons for

the strike. As the table shows, there was only one company with a strike position of over 75% against them – Mortgage Choice.

Three companies sat within 50% and 75%, and a further 13 between 25% and 50%.

COMPANYFINAL VOTE

AGAINST REPORT

KEY REASONS FOR STRIKEBREAKDOWN OF FINAL POSITION

MOC MORTGAGE CHOICE LIMITED 79.54% Exec Rem 75%-100% (1 Company)

CVO COVER-MORE GROUP LIMITED 70.89% Quantum of CEO pay

Failure to disclose intention to move to balanced scorecard

Second performance hurdle for its LTI plan


CAR CARSALES.COM LIMITED 54.79% Increases to fixed rem

Disclosure of performance hurdles

Use of fair value to allocate LTI

CBA COMMONWEALTH BANK OF AUSTRALIA. 50.91% Hurdles for performance pay inadequately explained and linked to cultural improvement measures

General dissatisfaction

MIN MINERAL RESOURCES LIMITED 49.18% Long term incentive only based on one measure (Return on invested capital)

Inadequate STI disclosure


UGL UGL LIMITED 44.12% CEO package

GMG GOODMAN GROUP 39.24% Exec Rem

Long Term Incentive Grants – larger than previous

AJX ALEXIUM INTERNATIONAL GROUP LIMITED

38.20% Exec Rem

AGL AGL ENERGY LIMITED 37.17% Statutory vs underlying numbers

Short Term Incentive awards

Proportion of bonus on non-financial targets

Inadequate communication

https://eganassociates.com.au/remuneration-report-strikes-2016-round-up/


resolutions– which sits at 36.3%. This is an indication that

transparency and integrity of resolutions become more

critical as companies face a second strike.

Companies facing a second strike: use of poll vs show of hands

Spill resolutionsAmbertech Limited (AMO)

The Spill meeting was held on 12 January 2017. Four

directors were nominated for re-election and all four were

re-appointed. They were appointed via a show of hands.

Royalco Resources Limited (RCO)

Royalco Resources Limited held its Spill meeting on 22

February 2017. In total, eight directors were nominated

for election or re-election. The re-election of one director

and election of three other directors was supported

by the company however; the remaining four director

nominations were not supported by the board. The four

directors supported by the board were all elected on a very

close poll vote count. The votes received in favour of their

election were between 50.26% and 50.38%. The directors

who failed to be elected received votes in favour of their

election between 49.29% and 49.58%.

Zeus Resources Limited (ZEU)

The Spill meeting was held on on 8 February 2017. Three

directors were up for re-election and all three were re-

appointed. Voting was executed via poll and each director

received more than of 90% of votes in favour.

Ongoing Strikes

Australian Ethical Investment Limited (AEF) and Globe

International Limited (GLB) have continued to record a

strike on their remuneration report each year since the 2

Strike legislation was introduced in July 2011.

GLB narrowly avoided having to hold a third consecutive

Spill meeting. The Spill resolution was defeated by

receiving just over 50% of the required against votes. To

reduce costs, GLB scheduled a Spill meeting to occur the

same day as their AGM, however as the Spill resolution was

(narrowly) not passed, the Spill meeting was not required to

be held.

A breakdown of ASX300 companies according to their

final vote position is depicted below. Just over 67% of

companies in the ASX300 received little or no opposition to

their Remuneration Report.

*20 companies were not required to include a

remuneration report at their meeting (including foreign

companies)

*ASX 300, Final vote position on Remuneration Report

Liquified Natural Gas Limited was the only company in the ASX300 to recieve a second strike.

Second strikes & Spill resolutionsOur research across all companies (clients and non clients)

indicates that while record numbers of companies are

facing a second strike, the number of Spill meetings held

is consistently low. Although pre-AGM engagement with

institutional investors may be awry, once key remuneration

issues are identified through a first strike, companies

are quick to react and rectify discrepancies to avoid a

dreaded second strike and subsequent potential for a Spill

resolution.

In 2016, a record number of 91 companies across all indices

faced a second strike.

Over the past three years, the number of companies facing

a second strike has increased by an average of 10% per

year. However, of the 91 companies facing a second strike

in 2016, only 16.5% (or 15 companies) actually received one.

This represents a 32% decrease on the previous year.

In 2016, this result was influenced largely by the proportion

of companies who did not hold an AGM in 2016 following

their first strike. This was for a variety of reasons - six

were suspended from the ASX, three went into voluntary

administration, one was delisted and another held a

scheme of arrangement.

Of the 80 remaining companies that faced a second strike

in 2016, the number of companies taking the remuneration

resolution to poll, compared to a show of hands, was split

evenly at 50%.

The number of clients using a poll when faced with a

second strike is considerably higher than the overall

number of clients who use a poll for general AGM

0-5%

10-15%

20-25%

30-35%

40-45%

<50%

67.04%

11.48%

7.41%

4.81%

2.59%

2.23%

0.74%

1.48%

0.37%

0.37%

1.48%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

201620152014

Decide Rem Report on show of hands

Decided Rem report via poll

Did not hold AGM

32

57

11

3943 39 4040

50% of companies facing a second strike used a poll


The use of qualitative non-financial performance hurdlesWe are not opposed to the use of qualitative or non-financial

hurdles in incentive schemes. However, where a company

uses such measures, ASA would expect clear disclosure of

the relevant hurdles and a description of how the measure

can be linked to improved financial performance and hence

securityholder outcomes.

A move away from the use of ‘fair value’More companies are moving away from the use of fair

value in determining the number of performance rights to

allocate to executives under a LTI scheme. There are good

reasons to prefer market value. The concept of ‘fair value’

draws from the accounting standards, but has been applied

to calculating the number of performance rights allocated

under incentive schemes. The number of performance rights

allocated should not take into account factors such as the

likelihood of performance hurdles not being met, which can

result in the discounting of market value of up to 60-70%.

Market value is based on VWAP which is more transparent

and easily understood by securityholders.

Influence of proxy advisersThe 2016 AGM season saw increased commentary about

the role of proxy advisers and their influence on voting

outcomes. In many cases, this highlighted the need for

greater dialogue between boards and proxy advisers. ASA

occasionally engages with proxy advisers but their views do

not carry any weight on ASA’s voting intentions.

Capital raisingsASA also continued its focus on companies raising capital

in a fair and equitable manner, with the majority of capital

raisings in 2016 by large companies now done by way

of a pro-rata accelerated institutional tradeable rights

entitlements offer. Where companies elected to raise

capital via an institutional placement, almost all were

followed by a share purchase plan which enabled retail

securityholders to subscribe for up to $15,000 of shares.

VotingGiven the importance of ensuring that all securityholders are

provided with the opportunity to vote on resolutions, ASA is

strongly of the view that it is poor governance for votes to

be held on a show of hands, given that the securityholders

present at the AGM represent a tiny portion of the total

securityholders. A poll reflects the wishes of securityholders

present at the meeting as well as those securityholders

who have lodged proxies. ASA holds proxies for many

retail securityholders, and we want to see their votes

counted. Voting on a show of hands disenfranchises those

securityholders who vote but cannot attend the AGM.

The majority of the ASX200 has moved to voting on a poll

and would like to see this as the established norm for all

companies.

The Australian Shareholders Association (ASA) monitored

177 companies in 2016, representing almost $4 billion in

proxies from retail securityholders. Some of the key issues

we saw in the 2016 AGM season were:

First strikes on the remuneration reportWhile high-profile first strikes generated considerable

attention, as did the withdrawal by boards of resolutions,

the outcome generated in each instance was greater

securityholder engagement – which we strongly support.

Reasons ASA voted against remuneration reports included

a lack of alignment between company performance

and remuneration outcomes, retention payments, poor

disclosure of performance hurdles and relationship with

outcomes, and concerns about the performance hurdles

that had been adopted.

Withdrawal of resolutionsWe saw resolutions withdrawn shortly before the AGM as it

was likely they would be defeated. Securityholder support

was lacking for new constitutional requirements for at

least 100 signatures, or securityholders holding at least five

per cent of share capital to sign a notice to nominate as a

director. Securityholder concerns about the structure of the

CEO’s long-term incentives also saw a resolution withdrawn.

Where companies withdraw resolutions within 48 hours of

an AGM, ASA expects disclosure of the proxy results and an

explanation for the withdrawal to be announced to ASX.

ASA: Perspectives 2016 AGM season Key issues and learnings from 2016

Judith Fox, Chief Executive Officer

T: +61 (2) 9252 4244

E: [email protected]


react to signs of some boards loosening the restraints on

executive pay, even though ACSI’s research work shows

that the best–practice boards are hiring new CEOs on base

salaries set at significantly less than their predecessors –

with the majority of their remuneration packages tied to

ensuring long-term outperformance by their company.

ACSI, which each year meets board representatives from

more than half of the ASX200, notes an increasing shift

by companies to report actual remuneration received by

their executive teams, rather than just complying with the

statutory reporting regime that can present a misleading

picture.

Several companies are also trying to find ways of simplifying

these increasingly complex schemes, some of them opting

for a single-layer scheme, rather than the conventional

short-term bonus and long-term equity structures, to try to

make them both appropriate and comprehensible for both

investors and executives.

On the positive side, the number of companies opting to

defer payment on a portion of their short-term incentives

(bonus) schemes continued to increase, lengthening the

time horizon of executive focus and giving boards the

capacity to reclaim, or clawback, rewards if performance

deteriorates.

Similarly, more companies are applying ‘gateways’ –

requiring a minimum level of corporate performance before

any bonuses can be paid – and requiring executives to clear

financial hurdles that measure return on capital employed

or free cash flow to try to improve the link between bonus

outcomes and long-term performance.

Resolutions withdrawnThe 2016 voting season also saw the forced withdrawal

of several controversial resolutions as a result of investor

opposition. Just two days prior to its AGM, Lendlease

dropped proposed constitutional amendments, which would

have significantly reduced the rights of securityholders to

nominate candidates to the board. A further five companies,

including the CBA, Magellan Financial and Evolution

Mining abandoned resolutions in response to shareholder

opposition.

Director accountability remained a focus for investors.

During the AGM season, Super Retail Group director John

Skippen stepped away from the board following a significant

‘against’ vote from investors. Elsewhere, directors at

Cabcharge and retail group Harvey Norman Holdings also

received substantial votes against from investors.

An increasing number of shareholder resolutions are being

proposed, most often seeking better disclosure of climate

change-related risks and opportunities. Although several

ASX-listed companies have opposed such propositions,

others Boards of Directors with a more global focus, such as

when ACSI represented the ‘Aiming for A’ investor coalition’

at mining giant Rio Tinto’s 2016 AGM, recognise their

importance and are supportive of these notions.

The Australian Council of Superannuation Investor’s (ACSI)

29 Australian members collectively manage more than

$450 billion on behalf of eight million superannuation fund

members. Along with its six international members, the

total of ACSI member funds under management is more

than $1.6 trillion in assets, belonging to more than 18 million

beneficiaries globally.

Collectively, ACSI’s members control close to 11% of the

average ASX200 company, in some instances holding as

much as 30% of the voting power – and all with a keen

interest in improving environmental, social and governance

(ESG) behaviours and practices among ASX-listed

companies.

ACSI’s members recognise that voting at company meetings

is an important fiduciary responsibility on behalf of their

members, as one way of managing corporate governance

risks at the companies in which they invest. Before ACSI

introduced its proxy voting advisory service, only 30% of

overall shareholdings were voted in Australia. While physical

attendance at AGMs might be declining, more than 60% of

votes are now exercised.

‘Strikes’ a blow for boardsIn 2016, that higher voting turnout resulted in a record

number of ‘strike’ votes (more than 25% of shareholders

opposing the non-binding remuneration report resolution)

across both the ASX200 and ASX300 indices – including

three among the ASX20, which ought to be seen as leaders

in good corporate governance.

These results may indicate that investors are beginning to

ACSI: Investor perspectives 2016 AGM season

Edward John - Executive Manager,

Governance, Engagement & Policy

T: +61 (3) 8677 3894


Ian McIlwraith

Governance and Engagement Analyst

T: +61 (3) 8677 3892



Key Themes for 2017:Board Diversity

ACSI and its members believe that skilled and suitably

diverse boards make for better-governed companies and,

as such, higher value investments for beneficiaries of ACSI

member funds – with the added benefit that diversity in

the boardroom is a good first step towards setting the

parameters for cultural, executive and employee diversity

throughout organisations.

Looking forward, ACSI’s board gender diversity program will

step up a notch in the 2017 voting season, with its members

having endorsed a voting policy against the elections or re-

elections of male directors at companies which have either

no women directors, or have failed to articulate a strategy

towards meeting a target of 30% women on their boards by

the close of this calendar year.

Both the ASX20 and ASX50 have now crossed that 30% line,

but the ASX200 is still at 25% – although only a tiny rump of

a dozen boards has yet to appoint even one woman director.

Climate Change

Climate change issues and the advent of international

standards such as the Task Force on Climate-related

Financial Disclosures’ framework and the UN’s Sustainable

Development Goals have heightened to the need for

companies to adequately report to investors on their

sustainability risks.

In 2017, ACSI is undertaking a campaign for increased

disclosure from a selected group of ASX200 companies

perceived as most-exposed to climate-related risks – and

opportunities.

Sustainability reporting

ACSI has been assessing ASX200 companies’ sustainability

reporting for over a decade and has often found that while

many companies are actually doing considerable work in

this space, often do not disclose or discuss with investors

their policies and practices, leaving them reputationally, and

potentially financially, vulnerable.

There is also a rising tide of investor concern regarding

allegations of underpayment of employees working in

franchisee groups – representing a potential risk to the value

of investments in exposed companies,


Remuneration report voting: it’s not just about pay

The 2016 AGM season has seen an increased number of

companies receiving strikes; and a slightly higher percentage

of votes against the remuneration report. While many strikes

can be attributed to particular remuneration practices

and decisions, in 2016, more than ever, the remuneration

vote appears to have been used as a ‘lightning rod’ to

express broader dissatisfaction with company performance

(including alignment with remuneration outcomes) and

decisions.

In the 2015 season, poor voting outcomes stemmed from

three key areas:

> Poor STI disclosures

> Selection of performance hurdles and reasonableness of

stretch in targets

> Pay and performance relationship including adjustments/

discretion / significant quantum / one-off payments.

In 2016, the same issues have been raised again; and with a heightened focus on non-financial metrics, quantum and one-off

payments.

Key themes 2016 AGM Season shareholder / proxy adviser concerns

Clarity and transparency of disclosures Disclosures not transparent enough to allow independent validation of ‘pay for

performance’

Insufficient disclosure of performance measures, weightings, thresholds, targets

or multipliers of STI

Lack of rationale behind pay approach

Perception of inappropriate outcomes Increases to fixed remuneration and increases that appear misaligned to

company performance

Bonuses paid at or above target where company performance is considered poor

Use of underlying measures where this creates a divergent experience from

shareholders

Equity grants seen to offset the gap between Australian and international

markets, or to compensate losses due to dilution around a capital raising

One-off payments One-off payments (e.g. retention or sign-on bonuses) seen as supplementing

reward for executives.

A lack of transparency of the latter has fueled concern.

Non-financial measures Correlation to shareholder value is ambiguous and difficult to evaluate

Some measures are perceived to be part of an executive’s day job e.g.

engagement, succession planning, culture

Lack of rigour and transparency of disclosures lead to a view that they are being

used to underpin ‘soft’ performance or to bolster executive pay

PWC: Remuneration perspectives 2016/2017 AGM Season

Andrew Curcio, Partner

T: +61 (3) 8603 1685


Emma Grogan, Partner

T: +61 (2) 8266 2420


Disclaimer: This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.


Consistent First time an

ASX50 receives a strike!

14.5%increase

5 x ASX50

ASX50


Did you attend a meeting?

Securityholder

Securityholder

97%

Did you vote?

Did you voteonline?

no

0.09%yes

no

3.8%yes

no

50%yes

61.4%issued capital

voted

mobile online voting11.1%

100% Uptake of Investor

Vote

poll uptake

Slightincrease

Outlook for 2017By virtue of the increased number of strikes in 2016 and

heightened media attention, the topic of executive pay is not

only in the minds of shareholders and proxy advisors but

the general public too. 2017 is shaping up to be a year for

Boards and Remuneration Committees to consider increased

transparency and additional engagement with shareholders

regarding the rationale behind how remuneration

frameworks enable their corporate strategy, and how

remuneration outcomes align to company performance.

Building trust and transparencySTI transparency continues to improve in response to

shareholders and proxy advisors demanding to fully

understand the details behind executive pay outcomes,

particularly in the wake of an increase in related strikes

during the 2016 AGM season.

Fixed pay relative to average employees is likely to remain a

concern for shareholders and the broader public. Executive

pay levels appears to have slowed in the last few years, and

given increased scrutiny on the topic amongst shareholders

and proxy advisors. We expect this trend to continue in FY17.

Calibrating pay for performanceGiven the lack of variability in FY16 incentive pay outcomes,

companies are likely to review how their variable payments

are calibrated relative to performance outcomes. There

should be some genuine variability in pay outcomes for

different levels of performance and we expect to see

instances of zero incentive payments for companies that

have experienced particularly poor shareholder - or even

inappropriate employee or customer outcomes.

Simplifying remuneration modelsCompanies will continue to explore simplifying their

remuneration frameworks, making them clearer and

more transparent to shareholders, and more focused and

engaging for participants.

Companies will need to carefully engage shareholders

and proxy advisors throughout any change process. Good

communication is expected and must be supported with a

clear and company specific business rationale and evidence

for any change.

Enhancing equity holdings for longer periods will be a likely

focus for most changes, creating stronger alignment with

the shareholder over the long term. In response, some

organisations are considering innovative remuneration

arrangements, such as combined incentive plans and fixed

equity models.

Re-engaging stakeholders on the value of non-financial measuresDespite broad criticism leveled at non-financial measures

within short and long-term incentive plans, some of these

KPIs have a place in underpinning the overall strategic

direction of companies. Boards and Remuneration

Committees must provide better disclosure and explanations

regarding linkages to company strategy in order to mitigate

potential backlash.

Within the ASX50 there was a flatline in securityholder attendance and voting, bucking the overall decreasing trends across all

AGMs. Issued capital voted by securityholders reached a record high of 61.4%, but much of this activity came from institutional

investors. The ASX50 was the only segment to report a decrease in the use of InvestorVote to vote issued capital, despite

having 100% uptake of InvestorVote for the first time.

The ASX50 also had 97% uptake of polls in 2016 - the highest engagement to date. This is a timely outcome against the

backdrop of increased strike activity in the ASX50. We anticipate companies in the ASX50 will have an ongoing focus on

upholding good corporate governance principles in 2017.

The ASX50: a snapshot


Slightdecrease

Slightincrease

13%increase in 2016

Slightdecrease

17%decrease

over 5 years

75%of online votes

come from ASX 300

10%increase

17 x ASX300

ASX300

companies received

a first strike


Securityholder

Securityholder

66%

Did you vote?

Did you voteonline?

no

0.12%yes

no

4%yes

no

yes

61.5%issued capital

voted

mobile online voting11.2%

of companies use a poll

17%increase

20%increase

25%of online votes come through

these companies

Outside


Securityholder

Securityholder

Did you vote?

Did you voteonline?

no

0.40%yes

no

5.4%yes

no

yes

55%issued capital

voted

Of all indices, ASX300 clients had the most weighted contribution to decreasing attendance trends. Generally, voting and

attendance trends in the ASX300 have decreased slowly year on year, with no significant spikes in activity.

Where we did witness higher engagement within the ASX300 segment, was with online voting (10% increase), the use of

polls (8% increase) and issued capital voted by securityholders (3% increase). In fact, Issued Capital voted within the ASX300

reached a 5 year high, with 61.5% of securityholders voting issued capital.

In 2016, there were a record 17 first strikes against remuneration reports within this segment, a 13% increase on the previous

year. This may remind many ASX300 companies to maintain consisten stakeholder communication coming into 2017’s AGM

season.

There has been a multiplicity of activity in companies sitting outside the ASX300, all pointing toward increased engagement

with AGMs - from both the securityholder and company perspective.

There was a spike in voting activity within this segment after a gradual drop from 2012 to 2015. This resulted in 5.4% of

securityholders voting, a 10% increase on the previous year. Attendance also returned to levels we saw in 2012 – around 0.4%

of securityholders attended AGMs versus 0.26% in 2015, this marks a 17% increase.

This increased activity was most evident in the 20% increase in issued capital voted by securityholders within this segment,

with an uptake of voting through online channels. The use of mobile technology to lodge votes increased by 10%. Poll usage

also increased by 30%.

The ASX300: a snapshot Outside the ASX300: a snapshot


Timing and locationWhilst often overlooked, AGM timing can play an important

role in proxy vote outcomes. In 2016, approximately 10% of

proxy close dates were on a Thursday, Friday or Saturday.

This means if a resolution is going a certain way, there is no

time over a weekend to canvas votes, which can impact on

the outcome of resolutions.

Meeting location is a potential channel by which to create

securityholder interest. Only 10 AGMs had over 300

attendees in 2016, and a further 40 AGMs seated between

100 and 300 attendees. This leaves venue options flexible

for the majority of the AGMs being held.

Security matters2016 saw an increased focus on security measures at

AGMs. More clients incorporated tight security measures

into their planning. This was approached in a variety of

ways:

> Clients used undercover security who stayed low-key

and mingled with guests, but were available to maintain

order in the event of an unanticipated verbal attack

from either activists or attendees.

> Clients used heavy security at the door and inside

the meeting to ensure a sense of order was visibly

maintained, especially if a known activist was

attending. This had a varying impact on the mood of

other securityholders.

Working with our clients to manage close to 750 meetings in 2016 means Computershare is privy to key trends and client

commonalities, both prior to and during AGM season. The following outlines some of the key areas of interest which may be

valuable to your company’s AGM strategy.

Meeting materialOur research shows, that on average, issuers have around 42% of

their securityholder’s email addresses and less than 2% of mobile

phone numbers. Email broadcasts continue to grow in popularity. Last

year we delivered 3.7 million emails, a 10% increase on 2015.

As engagement and attendance drops, our clients continue to look for

ways to reduce AGM costs. We often suggest revisiting the mailing

strategy as an ideal avenue to do this:

> We have seen many clients returning to a “back to basics”

approach with AGM material. Material is simpler, smaller, less

glossy and focussed on key information.

> Many of our clients have managed to save money by incorporating

‘catch-up mailings’. These mailings incorporate AGM information

into new securityholder packs. This alleviates the need to send a

seperate AGM pack to a select number of new securityholders.

> Clients continue to look for clever ways to encourage their

securityholders to nominate email as their primary communication

preference.

AGM Ahead Trends and turning points

In 2016, Computershare prepared a submission

for the Treasury consultation: Technology

neutrality in distributing company meeting

notices and materials.

The Government has acknowledged

that the current law does not reflect

the way Australians engage with digital

communications and wants to improve

financial regulation by making it technology

neutral.

As part of this submission we suggested that

notice via website could form a universally

acceptable method of giving notice to

shareholders. We also believe the reforms

should apply to distributing meeting materials

for all company meetings, not just AGMs.

SPOTLIGHT: Keeping Connected form A ‘Keeping Connected’ mail piece is a simple yet effective initiative which has helped clients reduce their ongoing mailing costs.

One of our clients included this form as part of their AGM & Dividend mail pack in April 2016, and then again with their Dividend

mail pack in October 2016. A total of 700,000 forms were sent to securityholders, of which 75,000 were returned.

From this process 38,000 securityholders nominated to receive their notice of meeting by email. This means a substantial

reduction in the number of packs which have to be mailed this year – and moving forward.

SPOTLIGHT: New space, fresh resultsA Computershare client created interest by moving their

AGM to Adelaide Oval in 2016. This move increased their

securityholder attendance from 480 people in 2015 to

550 people in 2016 (an increase of 15%) and saw higher

levels of engagement amongst attendees.

SPOTLIGHT: Being preparedWe saw instances of what can happen when security isn’t

employed. A client was caught off guard when 30 loud

unionists suddenly disturbed their AGM mid-way, causing

disruption to proceedings. Unfortunately, hotel security

was unprepared to adequately manage the situation.


Global perspectives – AGM season worldwideAround the globe, Computershare works on more

than 6,000 AGMs each year, giving us insight into key

international trends in 2016. Interestingly, securityholder

dissent around remuneration is more than a localised trend.

As global evidence shows, more and more, large companies

around the world are being held accountable for their

performance and pay.

New ZealandTrends in New Zealand indicated more securityholders

were voting but attendance trended downward. Issued

capital voted by securityholders also decreased to under

50% across all meetings. This is more than 10% lower than

Australia.

In 2016, New Zealand saw a marked increase in companies

choosing to conduct a poll compared to a show of hands.

NZX50 companies showed a 15% increase in polling on the

previous year, while companies outside the NZX50 showed

a significant increase of 31% on the previous year. This

was largely driven by the need for more transparency and

continued securityholder scrutiny.

Online voting continued to trend upward, growing 29.3%

over a five year period.

The United KingdomMuch like Australia, the UK experienced a contentious AGM

season in 2016.

Twelve FTSE 100 companies received less than 80%

support on their remuneration reports, compared to only

six during the 2015 AGM season. Additionally, two FTSE

100 companies received less than 80% support on their

remuneration policies, compared to none during the 2015

AGM season. Amongst the 30 biggest listed companies,

the proportion that secured at least 95% securityholder

backing across all resolutions halved in 2016, to 26%,

compared with 52% in 2015.

In the FTSE 250, four companies saw a board-proposed

resolution rejected by securityholders during the 2016 AGM

season.

Attendance and securityholder participation remained

consistent with recent years, though there has been a small

increase in retail securityholder attendance at AGMs, in

particular those who have embraced paperless electronic

communication.

Canada2016 saw an increase in the e-Broadcast of proxy materials

as advances in technology make electronic material

easier to access and read. Issuers have also become more

attuned to the costs associated with mass printings and

mailings, and are increasingly focused on reducing their

environmental impact.

In 2016, the average number of votes returned for meetings

administered by Computershare was 13.15%, an increase

of more than 3% over the previous year and the highest

percentage of returned votes in the past five years. This is

considerably higher than voting returns in Australia which

sit closer to 4.2%.

Canada is also slightly ahead of Australia with their online

voting which accounts for 41.4% of all votes versus 35.0%

in Australia. The use of mobile technology to lodge votes

sits at 6.2% compared to 4.0% in Australia.


Hong KongBucking the trend in Australia (attendance has declined

10% over the past five years), retail securityholders’

attendance at AGMs in Hong Kong grew in 2016. The

percentage of meetings with more than 100 attendees

increased by 15.4%, and overall attendance at meetings

continued to climb – up by 99.4% from 2012.

Bank of China Ltd topped the attendance charts, setting

a new record with 5,053 attendees in 2016. This is a 119%

increase over the five-year period.

In addition to the rising attendance levels, securityholder

dissent also appears to be on the rise in Hong Kong/China.

A total of 31 resolutions were voted down at meetings in

2016 – with the number of failed resolutions continuing to

rise every year.

GermanyGermany also experienced a volatile AGM season, with

securityholder attendance increasing across the board

– both for companies hit by scandal during the year, but

also for other big names. More than 6,500 securityholders

attended the BMW AGM, a 20% increase on the previous

year. The average securityholder vote participation level

at the AGMs of MDAX companies increased from 68.0% in

2015 to 71.7% in 2016.

Remarkable events in Germany included Volkswagen’s

(VW) AGM. Having lost more than 50% of its market

capitalisation, the company had a dramatic show-down

with securityholders due to the diesel scandal which was

felt around the globe. The AGM ran almost until midnight,

dealing with all of the securityholder queries.

Deutsche Bank felt the wrath of its securityholders,

who voted down its proposed remuneration plan for top

personnel. TAG Immobilien AG, an MDAX company, had

two board-proposed resolutions rejected outright by

securityholders.

Like Australia, pay was a much more crucial issue than in

previous years, with the average approval rate dropping

from above 90% to 72%.

Virtual AGM technology – a global perspectiveUSAIn the USA, virtual meetings have been running in some

form since 2009. The regulatory environment is more

complicated in the USA, some states do not allow virtual

meetings at all, and other states have changed their laws to

support the advancement of technology into meetings. One

of these states is Delaware, where most public companies

are listed.

Despite the complicated environment, virtual meetings

are growing steadily. In 2016, there were over 150 virtual

or hybrid meetings held by well-known companies such as

Hewlett Packard, GoPro, Yelp and Seaworld. The take up

of virtual meetings is expected to grow by over 30- 40% in

the coming years.

UKThe UK had its first virtual AGM in 2016, with luxury

accessories brand Jimmy Choo going through a diligent

process to ensure best practice governance. This included

shareholder consultation, changes to its constitution, and

legal input every step of the way. Thorough testing was

done before and after the AGM. The Jimmy Choo virtual

AGM recorded higher attendance than the preceding

physical AGM in 2015.

New ZealandThe pros and cons of virtual AGMs have been the subject

of strong public debate in New Zealand over the last 12

months. Whilst the Companies Act has allowed virtual

meetings to be held in NZ since 2012 - uptake has been

slow.

The NZ Shareholders Association (NZSA) strongly

recommends against companies having a fully virtual AGM,

citing censureship as a key issue. The Association claims

that once any virtual AGMs start happening the probability

of a physical meeting being held dimishes, reducing the

opportunity for securityholders to discuss key issues in

a tonally correct manner. Spark Energy and Z Energy

are two NZ based companies who are trying to lead the

charge with holding virtual meetings in 2017, citing cost

and efficiency as their key reasons for doing so. They have

faced strong opposition from the NZSA.


Cost considerationsMany companies feel negatively about

the financial burden of holding a

physical AGM, especially with declining

securityholder attendance. The cost per

head can run into thousands of dollars.

A hybrid AGM gives securityholders the

option of attending virtually. Having less

people atttend an AGM physically can

alleviate costs associated with:

- the type of meeting venue utilised

- event management costs such as

catering, the number of voting handsets

required and registration desks set up

- labour, including less staff, less

security and lower venue management

resources

- internal company travel and

accomodation.

Computershare can work with you

to undertake a costs versus benefit

analysis to help you understand your

options, and potentially ease the

financial outlay of an AGM.

Securityholder experienceAs AGM attendance slowly declines, one

of the key issues a company can address

is how to create a more engaging

experience for their securityholders.

Many securityholders are hindered by

domestic or global travel constraints.

Securityholders residing locally to an

AGM venue can be impeded by parking

restrictions, or other commitments.

A hybrid virtual meeting overcomes

these obstacles by giving all

securityholders a chance to be involved

in the AGM- from both a visual and

voting perspective. Attendees can watch

the presentation in real-time, view

other questions, see results unfold and

interact with the Board, all at their own

convenience.

It is worth considering, however, whether

your AGM draws attendance for reasons

peripheral to AGM content, for example,

goody bags or entertainment. If this is

the case, the channels used to create

engagement, especially online, may

need to be reinvented.

Cultural contextMany companies are entering the 2017

AGM season with some trepidation,

following a landmark year of high

profile strikes, shareholder dissent,

and increased scrutiny of executive

remuneration issues.

There has been much debate globally

about companies using AGM technology

to ‘hide’ from key issues or social

activists.

If your company has recently faced a

contentious AGM, received a strike in

2016, or is under the spotlight for any

number of reasons – a strong physical

presence remains important in 2017. A

hybrid AGM is a valuable asset to open

up communication channels with key

stakeholders and securityholders. It

demonstrates your committment to

staying in touch with the market.

A hybrid AGM also validates

securityholder identity and provides

real-time polling results, providing

a greater level of transparency and

integrity around resolutions.

Company brandAre you fast adopter of new technology?

Does your brand include elements of

innovation, and being first to market?

Do you value customer experience?

If you fit into this particular brand

profile, adopting a hybrid virtual AGM

will support your positioning and growth

profile. This is especially relevant with

the emergent demographic of Millennial

securityholders who value technology

and are quick to adopt real-time

innovations- especially those that link

into their personal mobile devices.

Utilising AGM technology provides the

added benefit of diverting away from

hand-held voting devices, alleviating

costs and logistics.

Computershare can work with you in

the roll-out of a solution that seamlessly

supports your brand in 2017, across all

customer touchpoints related to the

AGM experience.

Virtual AGM technology Where does your company fit?

In Australia, fully virtual and hybrid virtual meetings have been a point

of topical discussion for companies. Whilst business continues to move

on technological advances and manage digital disruption, the AGM

world has been comparably stagnant, anchored by its regulatory roots.

At Computershare we have been actively engaging with clients,

government bodies and other stakeholders to develop a relevant

virtual AGM solution. With the largest share register base in Australia,

and a commitment to continual conversations with our clients, we

understand many of the key issues that companies face over the AGM

season.

We are working with Lumi & NASDAQ, to develop a mobile meeting

application that facilitates a hybrid virtual AGM. A hybrid model

allows both physical and online attendance. It combines webcasting

and online voting software which runs whilst the physical meeting is

being held, allowing securityholder attendance and real-time voting ,

regardless of location or competing priorities.

Whilst the Australian regime does not directly address hybrid virtual

meetings, Computershare takes the position that it is possible to hold

the meeting under current rules.

With the impending approach of 2017’s AGM season, it could be time

to consider whether a hybrid option is the right solution for your

company? We have addressed some key considerations to help you

assess company readiness.


In the planning phase: Before the meeting: On the day:

Set a date with your meetings

provider early – to ensure that you

meet your regulatory requirements

Review strikes – did you receive one

in 2016? Do you know why

Identify decision makers behind your

top securityholders to predict how

they will vote

Book your AGM for Wednesday-Friday

to ensure there’s enough time to

rectify any overvotes by your proxy

close-off date

Update your list of Key

Management Personnel (KMPs)

and Closely Related Parties (CRP)

Ensure that management have

voted their positions (board

members and employee plan

trustees)

Work with your Returning Officer

to design a best-practice proxy

form

Monitor the press, industry

commentators and social media

before, during and after your AGM

Make sure you bring:

Meeting materials (Annual

Reports etc.)

Constitution

Previous meeting minutes

Chairman’s script/agenda

Have a designated contact

person available to speak with

activists/media and allow them

to voice their concerns prior to

the meeting

Organise a laptop with internet

connection so you can upload

ASX announcements at the

meeting

MELBOURNE

Computershare Conference Centre 452 Johnston Street Abbotsford VIC 3068 (03) 9415 5000 Contact your relationship manager or call 03 9415 5000 Capacity - 100

Crown Towers 8 Whiteman Street Southbank VIC 3006 (03) 9292 6968 www.crownhotels.com.au [email protected] Capacity - 2,500

Grand Hyatt Melbourne 123 Collins Street Melbourne VIC 3000 (03) 9657 1234 www.melbourne.grand.hyatt.com [email protected] Capacity - 1,120

The Langham 1 Southgate Avenue Southbank, VIC 3006 (03) 8696 8888 www.melbourne.langhamhotels.com.au [email protected] Capacity - 360

Melbourne Convention and Exhibition Centre 1 Convention Centre Place South Wharf VIC 3006 (03) 9235 8210 www.mcec.com.au [email protected] Capacity - 2,500

Melbourne Park Function Centre Melbourne & Olympic Parks Trust Batman Avenue Melbourne VIC 3000 (03) 9286 1600 www.melbournepark.com.au [email protected] Capacity - 1,100

RACV Club 501 Bourke Street Melbourne VIC 3000 1 300 139 059 www.racv.com.au [email protected] Capacity - 500

Sofitel Hotel 25 Collins Street Melbourne VIC 3000 (03) 9653 0000 www.sofitelmelbourne.com.au [email protected] Capacity - 1,000

ADELAIDE Adelaide Convention Centre North Terrace Adelaide SA 5000 (08) 8212 4099 www.adelaidecc.com.au [email protected] Capacity - 2,500

The Adelaide Entertainment Centre Corner Port Road and Adam Street Hindmarsh SA 5007 (08) 8208 2222 www.theaec.net [email protected] Capacity - 8,000

Adelaide Festival Centre King William Road Adelaide SA 5000 (08) 8216 8920 www.adelaidefestivalcentre.com.au [email protected] Capacity - 2,000

Hilton Hotel 233 Victoria Square Adelaide SA 5000 (08) 8217 2000 www.hilton.com [email protected] Capacity - 750

InterContinental Adelaide North Terrace Adelaide SA 5000 (08) 8238 2400 www.intercontinental.com [email protected] Capacity - 500

National Wine Centre of Australia Corner of Botanic and Hackney Rds Adelaide SA 5000 (08) 8303 3355 www.wineaustralia.com.au [email protected] Capacity - 480

Sebel Playford 120 North Terrace Adelaide SA 5000 1800 885 888 [email protected] Capacity - 450

AGM Assist Australian AGM venues


Stamford Plaza Hotel 150 North Terrace Adelaide SA 5000 (08) 8461 1111 www.stamford.com.au [email protected] Capacity – 250

Crowne Plaza Adelaide 16 Hindmarsh Square Adelaide SA 5000 (08) 8206 8888. www.crowneplazaadelaide.com.au [email protected]. Capacity – 380

PERTH

Crown Convention Centre Great Eastern Highway Burswood WA 6100 (08) 9362 7574 www.crownperth.com.au [email protected] Capacity - 1,800

Celtic Club 48 Ord Street West Perth WA 6005 (08) 9322 2299 www.celticclub.com.au [email protected] Capacity - 120

Duxton Hotel No.1 St George’s Terrace Perth WA 6000 (08) 9261 8000 www.perth.duxtonhotels.com [email protected] Capacity - 300

Hyatt Regency Perth 99 Adelaide Terrace Perth WA 6000 (08) 9225 1234 www.perth.regency.hyatt.com [email protected] Capacity - 1,000 Perth Concert Hall 5 St Georges Terrace Perth WA 6000 (08) 9231 9900 www.perthconcerthall.com.au [email protected] Capacity - 1,729

Parmelia Hilton Hotel 14 Mill Street Perth WA 6000 (08) 9215 2000 www.hilton.com [email protected] Capacity - 450

Perth Convention Centre 21 Mounts Bay Road Perth WA 6000 (08) 9338 0300 www.pcecwa.com.au [email protected] Capacity - 2,500

Pan Pacific Perth Hotel 207 Adelaide Terrace Perth WA 6000 (08) 9224 7722 www.panpacific.com [email protected] Capacity - 700

SYDNEY

City Recital Hall Angel Place Sydney NSW 2000 (02) 9231 9005 www.cityrecitalhall.com.au [email protected] Capacity - 1,238

Computershare Sydney Level 4, 60 Carrington Street Sydney NSW 2000 (02) 8234 5000 Contact your relationship manager or call 02 8234 5000 Capacity - 60

Four Seasons Hotel 199 George St Sydney NSW 2000 (02) 9250 3100 www.fourseasons.com/sydney [email protected] Capacity - 1,000 Sofitel Sydney Wentworth Hotel 61–101 Phillip Street Sydney NSW 2000 (02) 9228 9180 www.sofitelsydney.com.au [email protected] Capacity - 1,050

Wesley Centre 220 Pitt Street Sydney NSW 2000 (02) 9263 5500 www.wesleyconference.com [email protected] Capacity - 875

Westin Hotel Sydney 1 Martin Place Sydney NSW 2000 (02) 8223 1111 www.westin.com.au [email protected] Capacity - 1,400

BRISBANE

Brisbane Convention and Exhibition Centre Cnr. Merivale and Glenelg Sts. South Bank QLD 4101 (07) 3308 3000 www.bcec.com.au [email protected] Capacity - 2,032

Brisbane City Hall Brisbane QLD 4000 www.epicure.com.au/venues/venues/brisbane-city-hall [email protected] Capacity – 1,500

Brisbane Hilton Hotel 190 Elizabeth Street Brisbane QLD 4001 (07) 3234 2000 www.hilton.com [email protected] Capacity - 800

Christie Corporate Centre 320 Adelaide Street Brisbane QLD 4000 (07) 3010 9028 www.christieconference.com.au [email protected] Capacity – 250

Cliftons Conference Centre Brisbane 288 Edward Street Brisbane QLD 4000 www.cliftons.com [email protected] Capacity - 120

Customs House Brisbane 399 Queen Street Brisbane QLD 4000 www.customshouse.com.au [email protected] Capacity - 300

Emporium Hotel Brisbane 1000 Ann Street Fortitude Valley QLD 4006 www.emporium.com.au [email protected] Capacity - 280

Marriott Hotel Brisbane 515 Queen Street Brisbane QLD 4000 (07) 3303 8000 www.marriott.com [email protected] Capacity – 250

Novotel Brisbane Airport The Circuit Brisbane Airport QLD 4008 www.novotelbrisbaneairport.com.au [email protected] Capacity - 120

Sofitel Brisbane 249 Turbot Street Brisbane QLD 4000 (07) 3835 3535 www.sofitelbrisbane.com.au [email protected] Capacity - 1,100

Stamford Plaza Cnr. Edward & Margaret Streets Brisbane QLD 4000 (07) 3221 1999 www.stamford.com.au/spb [email protected] Capacity - 300

GOLD COAST

The Arts Centre Gold Coast Lakeside Terrace 135 Bundall Road Surfers Paradise QLD 4217 (07) 5588 4000 [email protected] www.theartscentregc.com.au Capacity: 800

Gold Coast Convention and Exhibition Centre Cnr. Gold Coast Highway & PE Peters Drive Broadbeach QLD 4218 (07) 5504 4000 www.gccec.com.au [email protected] Capacity - 6,020

Jupiter’s Casino Broadbeach Island Gold Coast QLD 4218 (07) 5592 8661 www.jupitersgoldcoast.com.au [email protected] Capacity - 2,300 Capacity - 1,400

About Computershare Limited (CPU)

Computershare (ASX: CPU) is a global market leader in transfer agency and share registration, employee equity plans, mortgage servicing, proxy solicitation and stakeholder communications. We also specialise in corporate trust, bankruptcy, class action and a range of other diversified financial and governance services.

Founded in 1978, Computershare is renowned for its expertise in high integrity data management, high volume transaction processing and reconciliations, payments and stakeholder engagement. Many of the world’s leading organisations use us to streamline and maximise the value of relationships with their investors, employees, creditors and customers.

Computershare is represented in all major financial markets and has over 16,000 employees worldwide.

For more information, visit www.computershare.com

COMPUTERSHARE INVESTOR SERVICES PTY LTD

Yarra Falls 452 Johnston St, Abbotsford VIC 3067

Adelaide (08) 8236 2300 Brisbane (07) 3237 2100

Melbourne (03) 9415 5000 Perth (08) 9323 2000

Sydney (02) 8234 5000

©2017 Computershare Investor Services Pty Limited. Computershare and the Computershare logo are registered trademarks of Computershare Limited.

No part of this document can be reproduced, by any means, without the prior and express written consent of Computershare.

Insights from Annual General Meetings held in 2016 Australia...Australia, giving us access to more...

Documents

Transcript of Insights from Annual General Meetings held in 2016 Australia...Australia, giving us access to more...