27 February 2020

That's a wrap – analysing AGM season 2019

This article was written by Joseph Muraca.

Bringing directors, management and shareholders together, the Annual General Meeting provides a platform for discussion on company performance and key corporate governance matters. It’s a key forum for shareholders to express a view and to hold companies to account. Remuneration remained a focus in 2019, with ASX 200 companies facing a consistent number of strikes on remuneration reports to those received in 2018.  There were also some ‘protest’ votes against director elections and re-elections but the vast majority of directors are still overwhelmingly supported by shareholders. At the same time, activist and institutional investors are in increasing numbers seeking to influence environmental, social and governance matters.

Our Annual Report on the AGMs in 2019 for the ASX 200 analyses the issues and emerging trends in each of these key areas. We’ve summarised our findings and observations below, with the full report accessible here.

Remuneration Reports

The number of ASX 200 companies that received strikes (15) remained the same as in 2018, but in 2019 only one remuneration report was voted down (i.e. opposed by 50%+ shareholders), compared to 6 the year before.


While it is not always easy to discern what drives a vote against a remuneration report, some of the most likely causes (and their implications) are discussed in our full report. These include remuneration structure and outcomes and company performance. At the same time, in comparison to 2018:

  • there were less ‘Royal Commission-driven’ protest votes (as to be expected); and
  • companies facing second strikes, for the most part, successfully addressed shareholder concerns and avoided second strikes.

Key takeaways

Remuneration will continue to be a hot topic in 2020. With APRA implementing new remuneration standards, how companies explain their approach to non-financial risks will need careful consideration. Regulators are watching, but our research reveals that the use of non-financial metrics to determine remuneration outcomes can be a factor that will lead shareholders to vote against remuneration reports. Thoughtful design and communication of remuneration structures and outcomes is critical to minimise the risk of disruption.

Environmental, Social & Governance (ESG) resolutions

12 companies put activist-requisitioned ESG resolutions to their shareholders in 2019, almost double the number (7) that did so in 2018. The advisory resolutions mainly related to climate change and human rights issues.


More companies are being targeted. Mining and energy companies have traditionally been the focus of ESG resolutions. However, in 2019 financial services companies figured heavily. Six ESG resolutions (half the total) were aimed at banks, insurers and financiers.

Key takeaways

All sectors will need to evaluate their exposure to issues of public concern. Despite the lower levels of support by shareholders, ESG resolutions continue to be an important part of activists’ long-term engagement strategies, particularly given the associated media attention they can generate. Sophisticated responses to an activist campaign will blend engagement with activist players and a rigorous understanding of the boundaries – enabling companies to protect themselves against inappropriate activity, ensure their AGMs remain relevant to all stakeholders, and ultimately provide a strategic path forward.

Votes on Director Elections & Re-elections

The average vote in support of directors’ election and re-election continues to be around 95%. However, there was an increase in the number of elections and re-elections with a vote in favour below 95% in 2019. Further, directors seeking re-election were significantly more likely to face protest votes.


‘Cross-contamination’ issues continue to play out with directors’ actual or perceived performance on other boards (or as executives in prior roles), affecting support for their election or re-election. ‘Overboarding’ (perceived excessive workloads) also continues to be raised in specific cases.

Key takeaways

In addition to the above, our research reveals several other issues are relevant considerations for determining boardroom makeup, including:

  • gender diversity;
  • directors’ tenure and its impact on their independence; and
  • directors’ perceived responsibility for compliance matters and company performance.

A more detailed analysis of these factors, and our findings and observations, is laid out in our full report.

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