The Federal Government has fast tracked the Corporations Amendment (Proxy Voting) Act 2012 (Amending Act) in time for the 2012 annual general meeting (AGM) season. The amendment clarifies the confusion surrounding proxy-voting by chairpersons for remuneration related matters.
Background
In 2011, the Corporations Act 2001 (Cth) was amended to give more power to shareholders on executive remuneration. Specifically, the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 (Executive Remuneration Act) introduced various changes, including new voting restrictions on key management personnel (KMP) and their closely related parties on remuneration related matters.
For more detail on the Executive Remuneration Act, please refer to our earlier eAlert!.
However, under the new law, there was some uncertainty as to whether a chairperson whose remuneration details were included in the remuneration report was prohibited from voting on the resolution to adopt the report.
What has changed?
The Amending Act clarifies that the chair of an AGM can vote undirected proxies in a shareholder vote on the remuneration report where the shareholder provides express authorisation.
The Amending Act was passed by Parliament on 18 June 2012 and given Royal Assent on 27 June 2012.
The changes therefore take effect just in time for companies preparing for upcoming AGMs.
What does this mean for the 2012 AGM season?
The Amending Act has clarified that the chairperson may vote undirected proxies in relation to the resolution on the remuneration report.
However, the change will require companies to review proxy forms to ensure express authority is given for the chairperson to vote undirected proxies in relation to the remuneration report.
Particularly for companies which are facing a potential second strike or which are at risk of receiving a first strike, getting the proxy form right to ensure accurate voting is essential.
For practical assistance with preparing for the 2012 AGM season, please contact us.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
