ASIC released an information sheet to provide options for listed companies to consider when complying with the current rules introduced by the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 (Cth) until amending legislation is introduced to address a legislative oversight.
The new rules technically prohibit the chairperson from voting any undirected proxies on the remuneration report resolution. However, the Government has indicated that the chairperson should be able to vote undirected proxies in certain circumstances, including on the remuneration report resolution when the shareholder authorises the chairperson to do so.
The information sheet sets out the various options available to companies for this forthcoming AGM season, including:
- ensuring that the chairperson will not vote any undirected proxies on the remuneration report resolution;
- drafting the proxy form and notice of meeting so that a shareholder giving an undirected proxy will be taken to have directed the chairperson to vote in accordance with the chairperson's clearly stated intention (which could be stated in the notice of meeting and proxy form);
- suggesting shareholders consider nominating a proxy other than a member of the company's key management personnel for the purposes of the remuneration report resolution; and
- applying to ASIC for relief.
The Government has announced that it will be introducing amendments to the Corporations Act 2001 (Cth) in the Spring Parliamentary sittings to remove the ambiguity.
See Government release, dated 10 August 2011.
For this forthcoming AGM season, companies will need to consider the options, as outlined in ASIC's information sheet, for voting on the remuneration report resolution.