Voting Transparency

Are comments by the chair factual or glossed over comments, that are questionable?

Executive remuneration
A key function of the Board is to oversee executive remuneration policy and practice to ensure it is fair, effective and in the interests of shareholders. It is a responsibility we take very seriously, rigorously applying our remuneration principles of being:
• Market competitive
From a historical tainted dataset. Because the self serving fiasco has been going on for many many years.
• Aligned with shareholders, taking account of risk.
Aligned with the top 20 and maybe not in the interest the majority of shareholders - the 24% of shareholding’s.

In 2018, application of our remuneration framework ensured that outcomes for key management personnel were strongly aligned with shareholder interests.
The interest of the top 20 shareholders, who in many cases are unidentifiable owners through nominees companies.

Generally within the 'top 20 companies' the majority of these companies reward their management team under the same or similar voting process, when dealing with remuneration, allocating shares and options.

It would be in these companies interest, to support this self servicing method and vote in favour for their fellow directors and management team in other companies that they hold shares in - through a number of vehicles.
If we look at AMP and Washington H Soul Pattinson, two of  'top 20 companies' that has an interest in CGF, they would unlikely be prepared to vote against the remuneration resolution because they also go through the same or similar process to determine their rewards resolutions.

One could conclude, that the rewarded one's, decide how much their cohorts should be rewarded.

This could also be viewed as forming a close 'association' possibly breaching the following regulations.

RG 128.24
The concept of ‘relevant interest’ revolves around control over voting and disposal of shares or interests. Because the concept is concerned with a person’s capacity to exercise a degree of influence over securities, it encompasses connections wider than ownership. As such, a number of people may have a relevant interest in the same securities in a variety of different capacities.

How does CGF identify owners within the nominees and custodians companies? Do they rely on the the integrity of the custodian companies informing their clients that they have a right to vote, or are the transfer of their voting rights to the company done in a formal manner.

Unless CGF management tries to identify these owners, it is possible for an individual to  exceed the 5% disclosure rule disguised as a number of clients within the custodian company.

We expect industry remuneration practices will continue to evolve over time in response to changing expectations and regulations.
The following comments were made by Telstra Chairman:
“I personally believe that executive salaries are too high across the board, but changing this takes time and needs to be embraced by all of corporate Australia, not just one company."

I am old enough to remember when a CEO just earned a big salary and that was it," he said.

Indeed, while voting indicates that most shareholders support our remuneration report this year, some concerns have been raised about aspects of our approach.

As is our usual practice, we will engage with stakeholders further over the coming months and consider any changes to ensure that our remuneration structure remains appropriate and contemporary.
Introduce two extra info or columns besides the poll voting  results relating to the remuneration and the issue of equities resolutions.
This extra information is collated on the bases of one vote per shareholder and entity.
That is my understanding how votes are dealt with, in mergers and demergers processes.

If there is great divergence between the poll result, management need to take heed of the reasons behind the disenchantment or displeasure – it will also be just an advisory.

The result will give a balanced view on how well the management team performance was perceived by the majority of shareholders and not purely based on the assessment of the privileged unidentifiable minority nominees shareholders and whoever advises them.

It also gives transparency to a suspicious reward system as seen by the majority of shareholders.
The best part, it gives visual confirmation that the Board and Management are finally listening to the majority of shareholders.

Hopefully, it will eventually lead to greater participation rate of eligible shareholders, voting. Shareholders participation is as low 4-5% in Australia. Computershare USA believes it the Custodian Campanies influences over the board and management as responsible for this low rate.

The Transparency Crusader

Radicool Views