2024 Year in Review: Australia

2024 was a milestone year for our business, as we became Sodali & Co. Following several acquisitions across our global business over the past few years, our rebrand was part of a strategy to bring them all together under one name – creating a world-class advisory firm across shareholder services, corporate governance, ESG advisory, and strategic communications. This change represents our unwavering dedication and commitment to excellence for our clients, supporting them to adapt and thrive in an increasingly volatile, uncertain, complex, and ambiguous world.

In Australia, we saw a relatively buoyant sharemarket, moderating inflation and low unemployment in 2024. However, cost-of-living pressures and stagnating economic growth persisted throughout the year, with business insolvencies hitting record highs. 

In this context, we continued to a see an elevated number of remuneration ‘strikes’ across the ASX300 in 2024 (40), which may suggest a ‘new norm’ after the record 41 strikes recorded in 2023 since the introduction of the ‘two-strikes’ rule in 2011. Investors and proxy advisors alike continued to use the remuneration report vote to voice concerns with the misalignment between pay relative to company performance and shareholder returns, or to protest major governance controversies and other non-financial factors.

Despite a notable decline in instances of high protest votes (>20%) against director re/elections in 2024 (32 vs. 46 in 2023), directors continued to be held accountable for the perceived inadequate oversight of various factors, including remuneration, governance, conduct risk, company performance and capital management decisions. In addition, the expectations on directors’ skills and duties continue to evolve in conjunction with the proliferation of regulatory policies and governance guidelines on emerging risk areas, such as cyber-security and artificial intelligence (AI).

There was a slight uptick in the number of ESG-related shareholder resolutions in 2024 (21 vs. 17 in 2023), mainly related to climate-related commitments and disclosures. However, for the first time we witnessed the emergence of nature-related shareholder resolutions requisitioned by a new ESG activist. In 2024, large companies were busy preparing for the introduction of Australia’s mandatory climate-related reporting regime (from 1 January 2025), as well as Australia becoming the world leader in greenwashing lawsuits. In 2025, Australian companies will need to navigate prevailing macroeconomic headwinds, the potential geopolitical impacts of a new U.S. President, and the aftermath of the upcoming Australian Federal Election. While it remains to be seen what impact this may have on future votes at company meetings, it’s evident that investor and proxy advisor scrutiny of Australian companies across various financial and non-financial factors will endure. Companies must remain vigilant and responsive to stakeholder concerns to avoid negative outcomes at their 2025 AGMs, and ultimately ensure that executive remuneration is well aligned with shareholder interests.

Our 2024 Year in Review – Australia, provides a snapshot of the voting outcomes, sentiments, and key reasons for proxy advisor recommendations and shareholder voting patterns, with a focus on S&P/ASX300 companies. It also provides an overview of important industry and regulatory trends in Australia and globally, across various remuneration, governance and sustainability themes. We hope you find this 2024 analysis useful to support your planning for 2025, and we welcome any feedback or follow up.