Mark Twidell, Kerry Schott, Christine Holman and John Pollaers are new board members
Chairman Patricia McKenzie declares she is still best placed to lead after the tech titan won a bid to install four new directors and the power giant suffered a first strike on pay.
AGL Energy chair Patricia McKenzie faces pressure to unite the company’s board after Mike Cannon-Brookes won a battle to install a raft of new directors and the power giant suffered a first strike on remuneration in a major win for the billionaire.
“A great day in the future of Australia’s decarbonisation,” the billionaire and AGL’s largest shareholder wrote in a post on Twitter after its annual meeting concluded. “Thank you to the incredible, talented individuals stepping up to help guide AGL into its next chapter and the amazing shareholders who overwhelmingly supported them.”
AGL’s board had rejected three of the four directors proposed by the businessman. But for the second time this year, Mr Cannon-Brookes prevailed after backing up a successful high profile campaign against a split of the company with a board shake-up aimed at more ambitious delivery of green energy goals.
High profile fund manager – and AGL shareholder – Geoff Wilson said further board upheaval may still follow among the new nine-strong board as investors questioned whether Ms McKenzie would step down just two months after her appointment.
“Today shareholders gave a strong message to the chair and all AGL directors that they need to step up,” said Mr Wilson, chairman of the $5bn Wilson Asset Management group. “With the new board members, it seems logical that the number of directors and their positions will result in change.”
Ms Holman stressed the board must now unite after a tumultuous year. “It is important as a board that we draw a line in the sand, unite and move ahead to rebuild AGL. The staff deserve that and stakeholders – who have and continue to support AGL – deserve that,” she said.
Ms McKenzie said she would remain in place while rubbishing a shareholder suggestion she had installed herself in the role.
“I assumed the role of chair at the request of the board. I did not appoint myself. I think that significantly overstates my powers,” Ms McKenzie told the meeting.
“I bring over 40 years experience in the energy industry. I am a proven leader and chair and I believe that I have received overwhelming support today from shareholders. I intend to continue as chair of AGL in order to provide continuity in what has been a turbulent time for the organisation and I look forward to leading the company into a sustainable and successful future.”
AGL had only recommended the election of Mark Twidell and rejected Kerry Schott, Christine Holman and John Pollaers. Shareholders voted in all four directors with Mr Twidell receiving 98 per cent support from votes cast, Ms Schott 85 per cent, Ms Holman 82 per cent in favour and Mr Pollaers at 62 per cent.
The power generator and retailer plans to exit coal by the middle of 2035, and has set an interim target of owning 5 gigawatts of renewable and back-up supply by the end of the decade.
Its plan includes the closure of Loy Lang A by 2035, a decade ahead of schedule, and the construction of a massive portfolio of renewable energy and battery assets capable of replacing the company’s coal-fired fleet.
While Mr Cannon-Brookes’ Grok Ventures was against its climate plan, Ms McKenzie pointed to 69 per cent support for its blueprint and said it was time to move forward with its strategy, a key battleground with Grok as it works to retire large coal stations at Loy Yang in Victoria and Bayswater in NSW’s Hunter Valley.
“Today marks an important day for AGL with shareholders’ broad endorsement of our Climate Transition Action Plan,” Ms McKenzie said. “This represents one of the most significant decarbonisation initiatives in Australia. I am pleased AGL can now move forward and deliver on this clear pathway for the company‘s future.”
AGL was hit by a backlash on climate change at its 2021 annual meeting after more than half of investors demanded steeper carbon cuts, a result hailed by Grok as a defining moment for Australia’s climate ambitions.
Grok had told shareholders to vote against AGL’s climate plan this year, saying it targeted a strategy that aligned with a 1.8 degree global warming target rather than a 1.5 degree goal.
Grok also voted against AGL’s remuneration report with its 11.3 per cent shareholding contributing to the company suffering a first strike on pay. Australia’s largest electricity generator said it disappointed by the backlash on remuneration.
The result was unexpected given major proxy advisers – who collectively influence about 30 per cent of AGL shares on issue – had backed the pay report.
“This is a disappointing result given that all major proxy advisers recommended that shareholders vote in favour of the report and no material concerns were identified,” Ms McKenzie said. “However, we will take this outcome into account when we review our remuneration structure during FY23 to consider opportunities to further align the structure with company performance and long-term shareholder value.”
A first strike occurs when 25 per cent or more of votes cast are against a remuneration report. The new directors are expected to focus on finding a new chief executive to lead the company, boost unity and stability of the board and accelerate the company’s green push while making practical steps to put its climate transition action plan in place.
The AGL chair said there was a shortlist of Australian and global candidates for the CEO role, filled in the interim by Damien Nicks. “We expect to announce the permanent CEO in the coming months,” Ms McKenzie said.
The billionaire’s latest triumph against the 185-year-old utility follows him previously derailing its demerger, sparking the exit of both its chief executive Graeme Hunt and former chairman Peter Botten.
AGL shares fell 1.2 per cent of 9c to $7.61.
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