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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.
Middletons has been awarded a 2012 EOWA Employer of Choice for
Women citation acknowledging our commitment to workplace
diversity.
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