This article was written by Joseph Muraca.
The 2019 AGM season for the first 6 months of calendar year 2019 has just ended with 39 ASX 200 companies having held AGMs so far in 2019. The results from those meetings suggest that AGMs this year may be just as combative as in 2018.
KWM will continue to monitor AGM results in the second half of 2019 and intends to publish a further report early in the new year.
Key observations
Our observations on key themes during 2019 so far for ASX 200 companies are summarised below:
| Theme |
Observation |
| Steady proportion of companies receiving strikes |
Three of the 36 ASX 200 companies that put forward remuneration reports so far this year (8%) received a first strike, matching the strike rate in 2018. This suggests that the voting trends in 2018 that saw a spike in the number of strikes might continue throughout the whole of 2019. While there are (as always) a number of possible explanations for this outcome, the underlying trend seems to be a continued willingness to use votes on the remuneration report not only to express dissatisfaction with remuneration arrangements, but also to send a signal on other matters, including company performance. |
| Strikes recorded by slimmer margins |
The magnitude of votes cast against remuneration reports so far this year is lower than it was in 2018. In 2018, some companies received more than 50% of votes against their remuneration reports (i.e. the remuneration was voted down). So far this year, the highest vote recorded against a remuneration report sits at 34%. |
| No second strikes |
We are yet to see a company receive a second strike in 2019. Those companies that received a first strike in 2018, including AMP and QBE, successfully responded to shareholder concerns and avoided another strike this year. |
| Continuing trend in director elections |
The proportion of directors receiving 'against' votes is on the rise since 2018, although only marginally, with 81% being elected or re-elected in 2019 with votes in favour above 95% (compared to 84% in 2018).
Similarly to 2018, those facing re-election (as opposed to election for the first time) have demonstrably higher votes against their candidature. Despite this, every candidate so far has successfully secured or retained a seat and all candidates have been board-endorsed. |
| ESG resolutions continue to flow in with little success |
Activists continue to use shareholder-requisitioned resolutions to pursue their agendas on environmental, social and governance issues, with a clear focus on climate change so far in 2019. However, the significant level of support which some activists garnered in 2018 is yet to be repeated in 2019. So far, no ESG resolution has received more than 2.5% of votes in favour. |
For a detailed analysis of our observations on the key themes for 2019 so far, please click here.
