Key Points:
Shareholders are using their power under the two-strikes
rule as a general protest vote against the board
Executive pay has come under the spotlight this AGM season, with
shareholders making use of new laws that allow them to hold company
boards to account via a vote on their remuneration reports. Concerningly, there is also
a trend for this power to be used by shareholders as a general
protest vote against the board.
Although shareholders have been able to vote on remuneration
reports for the past five years, the outcome has been non-binding.
On 1 July this year, new laws came into effect which include a rule
that, if a remuneration report receives a no vote at two successive
AGMs, the second AGM will have to vote on a spill motion. If the
spill motion receives approval by a simple majority, the company
will have to hold a further general meeting within 90 days to vote
on whether to keep the existing directors.
