At the conclusion of the 2015 AGM season, we conducted a survey of the business of AGMs of ASX listed entities in 2015.

We have once again focussed our survey on the S&P/ASX 100, and cover the following three aspects:

  • results of voting on remuneration reports for the S&P/ASX 100;
  • special business considered at AGMs of the S&P/ASX 100; and
  • other notable trends and developments.

There was an increase in first strikes and ‘near misses’ for remuneration reports.

Voting on remuneration reports

Under the ‘two strikes’ rule, if a listed company receives a ‘no vote’ against its remuneration report of at least 25% at two consecutive AGMs, the company must, at the second of those AGMs, put to the vote another resolution that another meeting (the spill meeting) be held within 90 days, at which the company’s directors will be subject to re-election.

Key findings for remuneration report voting in the 2015 AGM season include:

  • Four companies in the S&P/ASX 100 received a first strike against their remuneration report (one more than in each of 2013 and 2014).
  • For the fourth year in a row, no S&P/ASX 100 companies on a first strike received a second strike.
  • Three companies in the S&P/ASX 100 reported a near miss of more than 20% of shareholders voting against the remuneration report. This compares to only 1 company in the 2014 AGM season. Near miss figures cannot be calculated for the 6 entities in the S&P/ASX 100 who voted on the remuneration report by a show of hands.

These results are discussed further below.

First strikes

Table 1 details the four first strikes in the S&P/ASX 100 in the 2015 AGM season, together with the percentage of votes cast against the remuneration report and the voter turnout percentage in each case.

Table 1: S&P/ASX 100 – entities receiving First Strikes in 2015

Click here to view the table.

All 2015 First Strike recipients conducted the vote on the remuneration report by poll.

In each case, the first strikes on the remuneration report were achieved by ‘no votes’ cast by shareholders holding less than 35% of the company’s total number of shares on issue. In the case of ALS Ltd, the votes against the remuneration report were cast by shareholders holding only 15.64% of the company’s shares on issue.   

Second strikes

None of the entities in the S&P/ASX 100 that received a first strike in 2014 (of which there were three – see Table 2 below) received a second strike in 2015.

Table 2: ASX S&P/ASX 100 - 2015 results for entities which received First Strikes in 2014

Click here to view the table.

Each of these entities conducted their 2015 AGM voting on the remuneration report by poll.

In response to the first strikes received in 2014:

  • Harvey Norman Holdings replaced its cash-based long term incentive plan which was subject to financial conditions (weighted to 50%), non-financial conditions (weighted to 50%) and service conditions, with a performance rights plan subject to financial conditions (weighted to 100%) and service conditions.  It also froze fixed remuneration for its CEO and any other executive directors for financial year 2016, amongst other measures.
  • Newcrest consulted with some shareholders and proxy advisers and undertook benchmarking.  As a result, it implemented or formalised a number of measures.  This included freezing executive pay for current roles (other than mandatory superannuation guarantee charge increases, where applicable), deferral of 50% of STIs into equity, changing weightings between STI and LTI, general clawback provisions and a number of other measures.
  • Primary Health Care has responded with changes to remuneration and board composition. For example, its STIs and LTIs are no longer solely cash and LTI metrics will differ from STI metrics. STIs will be 25% rights, which will be deferred; LTIs will be 100% performance rights and deferral will be extended to 3 years. Salaries have been benchmarked.  Further, Newcrest’s board now has a majority of independent directors.

Other observations

  • As noted above, 3 companies in the S&P/ASX 100 reported a near miss of more than 20% of members voting against the remuneration report. These were Limited, Santos Limited and Graincorp Limited.  This compares to only 1 company in the 2014 AGM season recording a near miss.
  • As was the case in 20141, there was 1 entity which suffered a near miss which was not strictly subject to the remuneration report voting provisions of the Corporations Act.  Spark Infrastructure is subject to s.250R of the Corporations Act by virtue of its governance deed.
  • Near misses can only be calculated where poll voting is conducted and therefore vote numbers reported.  However, the increase in S&P/ASX 100 near misses noted above appear attributable to increased shareholder dissatisfaction for those particular entities, rather than an increase in voting on the remuneration report on a poll.   
  • In 2015, 6 companies voted on the remuneration report by a show of hands, compared to 16 in 2014.  As noted in our 2014 AGM survey, there was some controversy in the media over the decision of entities to put the 2014 resolution to a vote on a show of hands, instead of a poll (particularly outside the S&P/ASX 100).  ASIC noted that the Corporations Act did not require that these resolutions be put to a poll only and that the chair should give effect to the real sense of the meeting.2
  • Fortescue Metals Group put its remuneration report resolution to shareholders on a show of hands, despite 19.52% of recorded proxies being against the report.  The company reported to ASX that all resolutions at its 2015 AGM were “passed unanimously by show of hands”. 
  • Other notable protest votes were for banks Westpac (a 16.43% ‘no vote’, compared to 2.81%% in 2014) and ANZ (a 15.48% ‘no vote’, compared to 3.70% in 2014).

Special business items in 2015

Approval to grant securities to directors under employee incentive schemes

  • As was the case in 2014, the most common item of special business in 2015 involved the approval of grants of securities to executive directors under employee incentive schemes. Specifically, 66 entities in the S&P/ASX 100 sought security holder approval (only a very slight increase from 65 entities in 2014). 
  • Of these, 9 entities did not technically require approval for the purposes of the ASX Listing Rules, but sought approval nonetheless in the interests of good corporate governance and transparency.3
  • Several entities expressed an intention to purchase shares on-market and therefore did not necessarily require approval under the ASX Listing Rules, but sought approval in order to have the flexibility to issue new securities rather than undertaking those purchases.
  • All resolutions seeking approval to grant securities to executive directors were approved, except for one. Ansell’s resolution to approve a grant of options to the Managing Director was not carried, although a resolution to approve a grant of performance rights to the Managing Director was carried. Ansell was also the subject of a first strike. 
  • 15 entities in the S&P/ASX 100 stated in their notice of meeting that they may consider alternative remuneration arrangements if approval was not given for the grant of securities.
  • In addition to the 66 entities referred to above, 5 entities that had included in their notices of meeting resolutions to grant securities to an Executive Director did not proceed with voting on these resolutions at the AGM. In all but one case, the proposed resolutions were withdrawn prior to the AGM. For 3 entities (GPT Group, Insurance Australia Group and Medibank Private), the resolutions were withdrawn in connection with announcements regarding the retirement of the Managing Director. In the case of Origin Energy Ltd, the Company decided it was appropriate to withdraw its resolutions relating to proposed grants of securities to the Managing Director and an Executive Director following the Company’s announcement of a $4.7 billion suite of capital initiatives to strengthen its balance sheet and maintain an investment grade credit rating.

Termination benefits approval under the Corporations Act

  • 12 entities sought approval of termination benefits to management for the purposes of the Corporations Act.4 None of these approvals were sought where a retirement date had been determined. All termination benefits were approved by security holders.
  • 9 of the entities sought approval for the purposes of sections 200B and 200E of the Corporations Act as part of the resolutions seeking approval to grant securities to an executive director i.e. in conjunction with approvals for ASX Listing Rules purposes of issues to directors.
  • 3 of the entities sought blanket approvals, or renewal of previous blanket approvals for unnamed executives.

Approval to increase non-executive director fee pool

  • 18 entities in the S&P/ASX 100 sought to increase to their general NED fee pool (an increase of 4 more than in 2014). All increases were approved by shareholders, other than for AusNet Services (which also was the subject of a first strike).
  • The highest percentage increase was 59.09% (Ramsay Health Care Limited, which last increased its pool in 2013). The next highest increase was 50% (Sonic Health Care Limited, which last increased its fee pool in 2009).
  • The average percentage increase approved was 23.91% (excluding Sims Metal, which was seeking a change in currency from AUD to USD for its pool). The average number of years between seeking approvals to increase the NED fee poll was approximately 3.5 years.

Other observations

Conduct of voting

  • 89 entities in the S&P/ASX 100 voted exclusively by poll (compared with 74 entities in 2014), and 6 entities in the ASX 100 voted exclusively on a show of hands (compared with 16 in 2014).
  • 18 entities in the S&P/ASX 100 permitted direct voting at the 2014 AGM as an alternative to appointing a proxy or attending the AGM in person. There is significant potential for an increase in direct voting, given the number of ASX 100 entities with constitutions containing the option to permit direct voting.

Shareholder requisitioned and non-Board endorsed resolutions

  • 4 entities were required to address resolutions that had been requisitioned by shareholders under section 249N of the Corporations Act or for appointment of non-Board endorsed directors (compared with 6 entities in 2014). None of the resolutions were carried.
  • 3 of these entities (AGL, ANZ and Origin Energy had to address shareholder requisitioned resolutions proposing amendments to their respective constitutions relating to environmental matters.  For ANZ, the scope of the proposed resolution was not limited to environmental matters; it sought to amend the company’s constitution to authorise non-binding advisory votes by shareholders to express opinions or request information about how directors can exercise their powers. 


The 2015 AGM season results are relatively representative of prior years for the S&P/ASX 100, other than the increase in near misses or significant protest votes. 

There was also a significant decrease in voting by a show of hands, rather than by poll.  However, this did not appear to be the cause of the increase in S&P/ASX 100 first strike ‘near misses’, being no votes on the remuneration report in excess of 20%.