2023 AGM Season Review - Australia

Against a backdrop of a slowing economy, cost-of-living increases and a challenging consumer environment in 2023, proxy advisors and investors heavily scrutinised the alignment between remuneration and company performance and/or shareholder outcomes during the 2023 AGM season. In 2023, we witnessed a record 41 remuneration ‘strikes’ across the ASX300, significantly surpassing the prior record of 26 strikes set in 2019, since the introduction of the ‘two-strikes‘ rule more than a decade ago. We also saw a doubling of ASX300 directors attracting dissenting votes greater than 20% in 2023 compared to 2022, as company underperformance and ESG controversies contributed to greater scrutiny of director elections during the year.

Whilst 2023 was a relatively quiet year for shareholder activism across the ASX300 compared to the prior year (17 shareholder resolutions, down from 35 in 2022), sustainability-related topics remained a prominent feature of campaigns in 2023. Investors continued to seek greater director accountability for material business risks and opportunities, particularly those relating to climate change and cyber security. The year was also marked by significant developments in sustainability-related regulations and standardising of global reporting frameworks, including a new mandatory climate-reporting regime for Australia.

With many companies providing a cautious outlook for FY24, there is likely to be an even stronger focus on company performance in FY24. In addition, there will be an intensifying focus on ESG expertise on boards and directors’ track records in managing issues such as climate change, capital allocations (including M&A), cyber security, safety, worker conditions, biodiversity, human rights, and diversity and inclusion.

Our AGM Season Review – Australia, attempts to provide a snapshot of some of the voting outcomes, trends, sentiments, and key reasons for proxy advisor recommendations and shareholder voting patterns that we believe are important, with a focus on S&P/ASX300 companies.