AGM matters

Sandra BiggsState Manager - SA, Computershare Investor Services

2011 AGM SEASON WRAP

Voting increased marginally in 2011, but is down for 2012 to date

The majority of proxy votes are received in the two days prior to cut-off

The majority of shareholders cast their votes using traditional mail……however a growing proportion of issued capital is being voted online

110 companies received a ‘first strike’ in 2011

‘First strike’ in 2011 ‘First strike’ in 2012 (Computershare clients only)

How companies chose to treat the Chair’s undirected proxy votes on the remuneration report

Approach Percentage utilised 2011

Percentage utilised 2012 to date

Deemed direction with a tick box 61.9% 47.8%

Deemed direction with no tick box 18.5% 37.0%

Undirected proxy votes not available to the chair

13.1% 6.5%

Express authority with a tick box 3.4% 4.3%

Express authority with no tick box 3.1% 4.3%

For 2012...

Legislative fix to allow the Chair to vote undirected proxies on remuneration report with an express authority should now be passed in time for this year’s AGM season.

The practice of using a ‘deemed direction’ will no longer be required and the use of an express authority will become the standard.

Proxy voting forms confuse shareholdersOn a sample of companies who elected to use a tick box on their proxy form in 2011 to give a ‘deemed direction’ or ‘express authority’:

• 63% of shareholders who appointed the Chair on an undirected basis failed to check the tick box.

• This resulted in an average of 66% of undirected votes to the Chair on the remuneration report resolution not being counted.

Introduction of new legislation has resulted in proxy form wording becoming more complex.

When asked about significant changes to proxy forms last year, 67% of shareholders say they were about

the same, 8% say they were easier to

understand and only 6% say they were

harder to understand

Streamlining the voting process for top holders

Lost institutional votes creates a persistent challenge.

Pooling clients under a single registered name and HIN creates reconciliation challenges.

Incoming voting intentions are open to interpretation by voting agents, resulting in errors.

Our efforts to address this issue has been very successful with Intermediary Online, accounting for 27.4% of issued capital voted.

SHAREHOLDER VOTING INTENTIONS - 2012

Shareholders say that the ‘two strikes’ rule gives them more power in influencing remuneration policy

But 53% of shareholders were

not aware of the new legislation

before taking this survey

Shareholders who were aware of the new legislation, say their voting practices are now likely to change

Retails shareholders may

have good intentions, but past behaviour shows

overall voting levels are under 7%

50% of respondents who were not aware

of the new legislation said that

they are not intending to vote

this year

46% of shareholders intending to appoint a proxy say that they will direct their proxy which way to vote

THE FUTURE OF SHAREHOLDER COMMUNICATIONS

Shareholders prefer to make contact via web channels

73% of shareholders say that they would occasionally or always attend and participate in an online AGM if it was offered

72% of shareholders say they never attend

AGMs Top 5 reasons:

1.Distance2.No time3.Other commitments4.Not interested5.Small shareholder with no influence

Mobile device voting – an Australian first

AMP the first client in Australia to offer mobile device voting in the lead-up to their May AGM this year.

More than 7,000 AMP shareholders lodged their proxy votes online.

Over 500 lodged via mobile device.

We expect shareholders to respond positively as this channel becomes more widely available.

Digital Post Australia – Australia’s first digital postal service

Rates for shareholder ‘full e-communication’ have flat lined – the average is around 15%

Australian consumers are grappling with too many logins and passwords

Consumers want a simple and convenient single login for all communications

Digital Post Australia – Australia’s online postal service

Fee service providing users with a secure, digital mailbox to receive all their important communications online.

Centralised, secure portal – one login, all mail.

An exact digital facsimile of your shareholders’ physical mail documents.

Free, permanent and secure cloud archive.

The future of the AGM

Computershare expects to closely monitor and participate in the Corporations and Markets Advisory Committee’s examination into the future of the AGM.

Two strikes, what’s next?

A second strike (25% or more ‘no’ vote on the Remuneration Report resolution) will automatically trigger the ‘spill resolution’ to be voted.

If the ‘spill resolution’ receives 50% or more ‘for’ votes, a ‘spill meeting’ will need to take place within 90 days – all directors….

Companies requiring to schedule a ‘spill meeting’ will need to comply with the Corporations Act and dispatch documentation within the required legal time.

No matter the outcome on the Remuneration Report and spill resolutions, the strike count will be reset to zero going into the following year’s AGM