Investors seek clarity as AGM season kicks off

This year’s AGM season starts with a bang this week as Telstra, Commonwealth Bank and BHP hold meetings and give feedback on any COVID-19 fallout.

Telstra chairman John Mullen will address shareholders tuning into the group’s AGM this week. Picture: Hollie Adams

Telstra, Commonwealth Bank and BHP kick off this year’s annual meeting season, as investors seek trading updates and look to see whether companies reinstate earnings guidance.

Telstra and CBA are hosting online AGMs on Tuesday, while BHP’s virtual AGM is on Wednesday. Shareholders will want to know how companies are positioned to emerge from the COVID-19 disruption and navigate the economy’s first recession in almost three decades.

The AGM season also follows the bumper business stimulus and tax cut measures outlined in last week’s budget, and investors will be seeking feedback from boards on how the economy will fare in the year ahead.

Macquarie Wealth Management analysts highlighted the 2020 AGM period as more relevant than in prior years, given the impact of COVID-19 and that uncertainty had seen many companies withdraw guidance.

“Only 19 per cent of stocks gave earnings guidance during the August reporting season, with guidance still withdrawn for one in three companies due to high levels of uncertainty,” the research said.

“As a result, we suspect AGM trading updates and commentary could have a greater impact on share prices than you have seen in prior AGM seasons.”

Macquarie expects Telstra to provide an update on its corporate plan and reaffirm earnings guidance, and tips Commonwealth Bank to give an update on the number of loans it has on repayment pauses.

The CBA meeting will also see shareholders vote on the controversial granting of $1.6m in restricted stock units to CEO Matt Comyn. Proxy adviser ISS is urging investors vote against CBA’s remuneration report and the CEO grant, but other proxy houses Ownership Matters and CGI Glass Lewis are not opposing the move.

Macquarie’s report noted that in last year’s AGM season there were 7.7 per cent more strikes against rem reports, compared to an average of 7.2 per cent since 2011. A strike occurs when more than 25 per cent of shareholders vote against a company’s pay report.

Healthcare giant CSL, freight operator Aurizon and funds management group Perpetual are among the ASX companies that also have AGMs this week.