From endangered fish to price gouging: What will boards cop this AGM season

Tickets are (metaphorically speaking) on sale for corporate Australia’s version of the footy finals, as the annual general meeting season kicks off and shareholders get ready to quiz boards on everything from a company’s carbon footprint to executive pay – both of which many would say remain too high.

And this year’s prize for extreme shareholder activism must go to the team of environmentalists incensed by Woolworth and Coles’ role in the near extinction of the Maugean skate fish from its last-known habitat of Tasmania’s Macquarie Harbour.

The concern is that these stingray-like creatures are being obliterated thanks to the feeding of the waterway’s other occupants – the farmed salmon that Woolworths and Coles both buy under contract for their home brand. There are only 40 Maugean skate remaining, which incidentally is one less than the 41 companies that received shareholder strikes last year for how much their executives were being paid.

But can the skate and the salmon make this AGM season more absorbing than the last one? Last year was really a vintage year for governance issues, with Qantas undoubtedly the lightning rod for shareholder anger.

Qantas’ former chairman Richard Goyder and current chief executive Vanessa Hudson copped a lot of grief at the airline’s last AGM.Credit: Joe Armao

Almost 83 per cent voted against Qantas’ executive pay report last year – displaying their disenchantment with previous chief executive Alan Joyce’s pay packet (which has since been pared back), governance concerns and the airline’s treatment of consumers.

There are residual concerns among some shareholders, who feel that Qantas’ board didn’t claw back enough of Joyce’s entitlements, so the upcoming AGM won’t be an event-free affair.

But the fireworks will be minimal, with two of the influential proxy advisers giving Qantas’ remuneration report the thumbs up this year in recognition of board and management improvements and less benevolent pay incentives going forward.

That should be enough to take most of the heat out of the meeting, or at least that’s what Qantas’ new chairman, John Mullen, will be hoping for, but a second strike can’t be ruled out.

Another company at the big end of town that will come under the shareholder microscope will be ANZ. It won’t hold its meeting until December, but a series of scandals will place intense pressure on chief executive Shayne Elliott and chairman Paul O’Sullivan.

Corporate and prudential regulators have heightened concerns about ANZ’s governance, stemming from the bonds trading scandal, in which traders are alleged to have manipulated the bond rate, forcing up the federal government’s cost during a $14 billion debt sale last year.

That issue has exposed a host of cultural and governance problems at the bank that will receive plenty of scrutiny from major shareholders and their proxy advisers. Following the financial services royal commission, all banks received a significant shareholder backlash and the ANZ board will be bracing for impact.

The annual meetings at our two major supermarkets – Woolworths and Coles – should also provide some entertainment. While Woolworths and Coles have already been forced to weigh in on their complicity in making a marine species extinct, both have also been stung by an Australian Competition and Consumer Commission action alleging they have misled customers on pricing.

Given almost all of their retail shareholders are also customers, with many likely to have been whipped into a frenzy by the price-gouging claims, there is likely to be plenty of drama from the floor.

The 12 per cent decline in Woolworths’ share price this year will probably add extra spice to the proceedings.

Another notable board likely to cop some brickbats from shareholders will be that of the sharemarket operator, ASX, following legal claims from the Australian Securities and Investments Commission that it misled the public about the progress of a troubled software upgrade

Meanwhile, two of our major media companies, Nine Entertainment – the owner of this masthead – and Seven West Media, will undoubtedly field questions on workplace cultural issues that have dominated the headlines this year.

While there are a number of high-profile companies under the glare of regulators, shareholders and the community, the proxy advisers keep an eye on governance and remuneration thematics and make recommendations to large shareholders.

Institutional Shareholder Services’ Vas Kolesnikoff, who advises large investors on how to vote on executive pay packets and put difficult questions to a board, said early signs pointed to shareholders persisting with concerns about executive bonuses and the use of opaque and readily achievable non-financial performance measures to justify them.

While investors continue to be well served by the major companies, this year’s annual meeting season should be a handy barometer of how much social licence they are willing to give to companies in the limelight for all the wrong reasons.

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