Company chairmen will be able to vote undirected proxies on the
remuneration report... eventually.
Recent amendments to the Corporations Act said that chairs both
could and couldn't vote
undirected proxies on the remuneration report. A new Bill aims to
remove the contradiction and make it clear that the chair can vote
undirected proxies on the remuneration report if the proxy
"expressly authorises the chair to exercise the
Unfortunately, the new Bill may not be of any use for the
current AGM season. The Bill is still before Parliament. Parliament
does not meet again until 11 October, so the Bill will not come
into effect until mid-October at the very
Accordingly, while the Bill is welcome news, companies are still
left with the options that we canvassed in our recent
Alert on this topic:
make no change to the company's usual proxy form and
ensure that the chair does not vote any undirected proxies on the
remuneration report resolution;
change the company's proxy form with a view to ensuring
that there are more directed proxies, which can be counted in the
vote on the remuneration report;
suggest to shareholders that they should consider nominating a
proxy other than a member of the company's key management
personnel for the purposes of the remuneration report resolution;
apply to ASIC for relief (which will be considered on a
If a company has proposed an amended proxy form (the second
approach above) to have a directed proxy notwithstanding the
failure of the proxy appointor to mark the for, against or abstain
boxes of the remuneration report resolution, the new law when
passed should not affect those proxies if appropriately drafted as
those proxies are not undirected proxies.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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