Most Significant Votes (w/e 7th November)

Welcome back to Most Significant Votes! For the second time this voting season we bring you the key AGM decisions that matter to asset owners and on which they may wish to hold their fund managers accountable. This is the Southern Hemisphere voting season and we'll consider votes from there, as well as the smaller number of Northern Hemisphere companies holding meetings at this time.

Elon Musk will have been delighted by events at Tesla (AGM 6th November) — the world record-shattering $1 trillion incentive scheme for Musk reportedly passed with 75% support, as announced at the AGM. We await the formal release of the overall results and will cover those fully next time.

Key votes this fortnight

• James Hardie (AGM 30th October): The building materials firm achieved the dubious distinction of seeing 6 management resolutions defeated at a single AGM. The latest controversy is a A$14 billion merger with US decking firm Azek, which was not put up for shareholder approval as many thought it should have been and has contributed to the share price plummeting by a third this year. Investor frustration boiled over with 3 directors ousted outright — including chair Anne Lloyd, facing 67% votes against — and two others elected with more than 40% opposition. Extraordinarily rare to see individuals voted off in the absence of rival candidates. Against that cataclysm, the defeat of 3 further resolutions on pay seems more mundane, but 66% opposition to the remuneration report remains remarkable; 51% opposed share awards to the CEO on ROCE performance; and 59% declined an increase in the non-executive fee pool.
• CSL (AGM 28th October): A stunning 43% voted against the remuneration report — an extremely rare second vote above 25% against in two years (it was 27% last year), triggering Australia's 'board spill' resolution. That vote won only 2% backing. With only 5% voting against share awards to CEO Paul McKenzie (down from 23% last year), investor concerns appear more backward-looking: they believe the company was excessively generous in a year when it hit strategic problems including a profit warning and the pulling of a planned separate listing for its vaccine business. McKenzie was paid US$9 million, around 70% of median CEO pay at predominantly US peers.
• Woolworths (AGM 30th October): A 17% vote against the remuneration report. The Australian supermarket also faced 4 substantive shareholder resolutions on nature protections in supply chains. A call for more reporting on salmon sourcing from Macquarie Harbour — where fishing threatens survival of the Maugean Skate — won 35% backing; a policy change resolution won 16%. A call to acknowledge beef as a significant deforestation risk won 14%; removal of a timber certification standard deemed weak won 7%.
• Fortescue (AGM 31st October): The headline 32% abstaining on the remuneration report is predominantly executive chair Andrew Forrest's required abstention. The 10% votes against share awards to each of the co-CEOs (each paid A$7.5 million) look more like 18% opposition from institutions when Forrest's shares are excluded.
• Insurance Australia Group (IAG) (AGM 23rd October): Around 13% voted against the appointment of JoAnne Stephenson, apparently due to independence concerns given her history at KPMG, the company's auditor. 24% of shareholders opposed an increase in the non-executive fee pool from A$4 million to A$4.7 million.
• Impala Platinum (Implats) (AGM 30th October): A 33% vote against the remuneration report and 11% against the policy. CEO Nico Muller was paid R53 million; 78% of staff earn less than one-hundredth of that. Investors may also have been disquieted at the payment of significant incentives despite 8 fatalities at operations (a reduction on 19 deaths the prior year).
• Core Scientific (EGM 30th October): A remarkable 92% of investors opposed the proposed merger with peer CoreWeave, worth $9 billion at announcement. 96% opposed the board's recommendation to approve related pay for executives in connection with the deal.

That's it for this fortnight. We'll be back with Most Significant Votes in two weeks' time, on November 21st.

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