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The 2017 Annual General Meeting (AGM) season is fast-approaching and listed companies are currently planning for one of the most important events in the corporate calendar year.

There are several relevant timing considerations which a listed company should be aware of leading up to its AGM. For most companies, the end of their financial year is 30 June, which means AGM material needs to be prepared, printed and distributed to shareholders whilst complying with the prerequisite notice period ensuring the AGM is held no later than 30 November.

This update aims to provide a summary of practical considerations for companies preparing their AGM and guidance on what the Australian Shareholders’ Association will be focusing on this year.

Common Resolutions

• Re-election of directors: Directors will serve and vacate their positions as per the constitutional requirements.
• Two strikes resolution: A “Spill Resolution” must be included in the AGM material if, at last year’s AGM, more than 25% of eligible votes were voted against the adoption of the remuneration report.
• Ratification of allotments: Companies should consider whether any securities were issued during the previous 12 months which were not approved by shareholders. By ratifying the issue of securities, companies will retain the flexibility to issue securities in the future, up to the 15% placement capacity.
• ASX Listing Rule 7.1A: Eligible companies may seek shareholder approval for the issue of a further 10% of their issued capital over a 12-month period following the AGM.
• Approval or renewal of an Employee Incentive Scheme: If a company wishes to exempt issues of securities under an employee share/option plan or performance rights plan from contributing towards the 15% placement capacity, these plans must be refreshed every 3 years for the company to rely on exception 9 in ASX Listing Rule 7.2.
• Proportional takeovers resolution: Companies may have constitutional provisions relating to proportional takeovers. The provisions have effect for 3 years from the date of adoption and will then cease to apply unless renewed by special resolution.

Other resolutions concerning the company may also be conveniently considered at the AGM, such as resolutions which requires amendment to the company’s constitution. This may include structuring a clause in the constitution to allow the sale of less than marketable parcels and the distribution of proceeds electronically, where legally permissible.

Timeframes

• Lodgement of AGM materials with the regulators: Companies should bear in mind the timing constraints when lodging their AGM materials with the regulators (if required). The ASX require 5 clear business days to conduct their review. Certain resolutions, such as ‘related party’ transactions will need to be reviewed by ASIC. Companies should allow for 14 days for ASIC to finalise their review.
• Distribution to shareholders: This is sometimes overlooked, but it is important that companies allow for 3 clear business days for the printing and distribution of AGM materials. It is strongly advisable to book your print and mail as soon as your AGM date is known.
  It is also worth noting the number of shareholders who have elected to receive their AGM materials electronically, thus reducing printing and postage costs.
• Notice period: As per s249HA CA, an ASX listed entity must give at least 28 days’ notice of an AGM. The 28 days must be ‘clear days’ and the day of the meeting or the day of despatch of the meeting notice cannot be counted. The meeting materials will be deemed to be received by shareholders within a specified period. This period is stipulated in the company constitution, typically 1-3 days.

Proxy Advisers and Institutional Investors

Given the current legislative requirements, most AGMs are held during October and November resulting in proxy advisory groups conducting their analysis within a very tight timeframe. Access by companies to proxy advisory firms and institutional investors is limited during the AGM season with communication restricted to exceptional circumstances.

With shareholder class action and other disruptive activity on the rise, companies require greater access to the underlying beneficial ownership of their shares and proxy advisors.

Commencing communication with institutional investors and proxy advisory firms prior to the peak season could prove beneficial in securing a positive outcome at the AGM.

Automic can support you with these services if you have any requirements for this, please do not hesitate to let us know.

Australian Shareholders’ Association

Each year the Australian Shareholders’ Association (ASA) provides an indication on which areas they will focus their energy.

Extracted verbatim, the ASA will be paying particular attention to the following:

• Remuneration disclosure: Disclosure of quality information regarding STI performance metrics and actual outcomes as measured against those metrics for the CEO and KMP. Inclusion of a table of actual take home remuneration for the CEO and KMP and use of “market value” rather than “fair value” in calculating LTI grants.
• Skin in the game: Board and executive alignment with shareholders, including that a non-executive director who has served 3 years on a board should have invested one year’s fees in the company’s shares and that a CEO should have invested one year’s fixed remuneration in the company’s shares after 5 years.
• Board composition: Companies to have an independent chairman, a majority of independent directors, only one executive director and boards should be comprised of at least 30% female directors.
• Fairness in capital raisings: Companies to ensure retail shareholders have adequate time and opportunity to participate equitably in capital raisings and to reduce the extent of any dilution to the holdings of retail shareholders.

Meeting Services

For the 2017 AGM season, Automic is providing complete AGM management packages including investor communications, online voting services, support with your meeting materials, onsite registration and polling, as well as venue hire.

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