Halfway through the annual general meeting season corporate Australia is emerging virtually unscathed, in part because companies are more engaged with their shareholders.
Just three big companies have received 25 per cent or more “no” votes to their remuneration reports, triggering a so-called “strike”, the villains being UGL, Mortgage Choice and McMillan Shakespeare.
Last year there were 22 strikes imposed on top 300 companies.
The UGL situation is worthy of note for many reasons, including that proxy advisers generally supported the company’s remuneration report, so the protesting shareholders did so on their own.
This makes a lie of historic Australian Institute of Company Directors’ claims that shareholders have outsourced decision making to the proxy advisers.
The reality is, as the proxy advisers have long argued, they are just the messenger and shareholders are actually quite capable of making up their own minds, and do so.
The directors club has realised that shareholder engagement actually works, and that is no bad thing either.
Ownership Matters, among others, had recommended against a share grant to Amcor boss Ken MacKenzie on the grounds its hurdle rate was too low, but shareholders overwhelmingly backed the handout.
Amcor had talked its shareholders through the rationale for its bonus, and given MacKenzie ranks as the most admired chief executive in corporate Australia these days, (along with Louis Gries at James Hardie) they backed his share grant overwhelmingly.
It is nine years since non-binding votes on pay reports came into effect, and it would seem companies have finally got the message that it is good to engage with shareholders.
Pay reports are the only issue, outside nominations, on which shareholders can vote, which explains the focus.
The more benign results may also signal the times, because post GFC few chief executives have hand their hand out looking for big payments.
Now some blue sky is emerging for the economy, just maybe the bosses will be more aggressive in their pay claims.