After a tumultuous 2023 season marked by a record high number of strikes and high-profile shareholder interventions, annual general meetings (AGMs) in the first half of 2024 have been comparatively more subdued.
A few notable trends that we’ve observed from our analysis of AGMs of ASX200 companies:[1]
- onshore companies continue to trial fully physical and hybrid formats, with some going fully physical after a previous hybrid AGM, and some others taking the reverse pathway
- however, the number of fully physical meetings overall is lower than that of 2023
- fully virtual meetings continue to be rare and are predominantly chosen by companies incorporated offshore
- shareholder interests in macro-economic and social matters remain, but without a highly publicised and contentious issue like the Voice for shareholders to rally behind, focus appears to be back on company-specific matters
- in comparison to 2023, there have been fewer strikes and smaller opposition to director elections and re-elections
- however, shareholder activism continues, albeit taking different forms
We analysed data from the AGMs of ASX200 companies held in the first half of 2024. We’ve compared that data against the full year data for 2023, 2022 and 2021 where we believe this paints a more accurate picture. In any case, the article does not necessarily provide a direct company-for-company comparison due to, for example, movements in the composition of the ASX200 between calendar year 2024 and the relevant previous calendar year(s).
A return to normalcy on the surface?
AGMs of ASX200 companies held in the first half of 2024 returned to normal in some regards, with strike rates reverting back to the pre-2023 average of 9% (that is, 9% of ASX200 companies that held their AGM in the first half received a strike on their remuneration report). These strikes were all first strikes in 2024. This is significantly down on 12% in the first half of 2023 and 16% across the year.
For the first half of 2024, the average protest vote against the remuneration report was 6.5%, again significantly down compared to nearly 14% in 2023, and consistent with 7% in 2022.
We’ve seen a similar return to pre-2023 levels for director election and re-election votes. Overall, directors up for election or re-election received an average support vote of 96%. All candidates who ran were board endorsed, and were elected. Only a handful of directors were subject to a protest vote of more than 15%.
Strike rate comparison
An undercurrent of shareholder activism below?
While strikes, director protest votes and shareholder-requisitioned resolutions of ASX200 companies are down, shareholder activist campaigns are nonetheless running hot.
There have been no shareholder-requisitioned resolutions at AGMs of ASX200 companies in the first half of 2024. At the halfway point of 2023, there had been one requisitioned shareholder resolution relating to climate, which increased to six in total by the end of the year.
But shareholder activism in other forms continues, in some circumstances without notable media coverage.
We observed an increased push back from shareholders against CEO equity grants, with multiple companies facing 20-25% protest votes (albeit no resolutions failed to pass).
Climate activists dominated shareholder questions at some AGMs and organised physical protests to express their dissatisfaction at some others.
Continuing the trend we saw in 2023, we have seen substantial shareholders activate for board seats to have an ongoing say at the board table. In one case a substantial shareholder of a listed company who had previously had its director nominee elected to the board requested additional board representation with a second nominee director. Shareholders of this company voted in favour of a resolution permitting an increase in the maximum number of directors on its board, paving the way for the shareholder to nominate a second representative.
This increase in activism is backed by data compiled by Bloomberg Intelligence which suggests 2024 is a record breaking year for shareholder activism. Bloomberg reported that as at 27 May 2024, there had been 27 campaigns launched on ASX-listed companies, more than double the average over the past decade for the same period.[2] Board changes (including removal of existing directors and election of director nominees) accounted for more than two thirds of the requests made by shareholder activists, in a number of circumstances to protest against the company’s performance and strategy. Since 27 May, Bloomberg has recorded another 8 campaigns against ASX-listed companies.[3] Bloomberg’s data confirms the resurgence in activist shareholder activity we’ve seen in recent years.
It’s worth noting that not all activist requests end up playing out at the AGM. In at least one circumstance involving an ASX200 company, pre-AGM engagement helped de-escalate the situation with no shareholder-nominated candidate being put forward for election as a director.
Shareholder questions
Compared to last year, shareholder questions on macro-economic and social matters have been less prominent and the focus has shifted back to company-specific questions, with topics spanning from operational strategy, updates on previously disclosed strategic projects / transactions, directors’ time commitments, adequacy of cyber measures and approach to artificial intelligence and climate change. Shareholder questions continue to show a close monitoring of the company’s operations, performance and market disclosures.
There continues to be mixed practice in terms of the format for Q&A. Some ASX200 companies that held AGMs in the first half of 2024 took questions in one lot (eg at the end of the items of business) while others invited questions after each resolution or each subject matter (such as after director elections, and then after remuneration-related resolutions, etc.).
AGM format
Hybrid AGMs continue to be the most common with 59% of the ASX200 companies holding AGMs in the first half of the year opting for this format.[4] The percentage of fully physical AGMs has decreased to 26%, down from roughly 34% across all of 2023 and down from 32% for the first half of 2023.
There have been only five fully virtual AGMs in the first half of 2024, with this format being chosen predominantly by companies incorporated in the United States. All five of these companies also held fully virtual meetings in 2023, and only one was incorporated in Australia.
Format of AGMs for the first half of 2024
As above, embedded dataset.
By hybrid, we mean a meeting held at one or more physical venues and using virtual meeting technology.
Given the technical difficulties some companies have experienced with the verbal component of the online question facility used at their AGM and how sparsely this function is used, we expect the second half of the year to see an increasing number of companies moving towards fully physical.
Treasury is currently seeking feedback on the effectiveness of recent amendments to the Corporations Act which allow a company to hold fully virtual AGMs if the company’s constitution so permits. A question being considered as part of the review is “whether (compared to physical meetings) wholly online or hybrid meetings have created difficulties for members, in terms of their participation and voting in meetings or otherwise, and if so, how those problems might be addressed, and whether the cost of convening and holding wholly online or hybrid meetings is higher or lower than physical meetings”.[5] The review is, reportedly,[6] being undertaken with a view to give companies a statutory right to hold fully virtual AGMs regardless of what’s provided in the constitution. This is interesting in light of proxy advisors’ campaigns against constitutional amendments to allow fully virtual AGMs in recent years.
For more detail on trends in AGM format in recent years, see our Deep dive into ASX200 AGMS in 2023 and Deep dive into ASX200 AGMs in 2022 (which are cited in both Treasury’s consultation paper and the Australian Institute of Company Directors’ call for feedback).
Treasury, ‘Statutory review of the meetings and documents amendments – Consultation paper’, page 2.