1 00:00:05,720 --> 00:00:08,440 Speaker 1: Welcome to the Fear and Greed Business Interview. I'm Sean Almer. 2 00:00:08,840 --> 00:00:12,280 Speaker 1: It's a GM season, the time when shareholders here directly 3 00:00:12,320 --> 00:00:15,840 Speaker 1: from the executives and boards running the companies they invest in, 4 00:00:15,960 --> 00:00:18,799 Speaker 1: and can put their own questions to them as well. Importantly, 5 00:00:18,800 --> 00:00:21,280 Speaker 1: it's also an opportunity for investors to vote on matters 6 00:00:21,280 --> 00:00:25,200 Speaker 1: affecting the company. In many cases, shareholders don't attend or 7 00:00:25,280 --> 00:00:28,520 Speaker 1: vote in person, instead appointing a proxy to do it 8 00:00:28,560 --> 00:00:31,400 Speaker 1: for them, and that's where groups like the Australian Shareholders 9 00:00:31,440 --> 00:00:35,120 Speaker 1: Association come in. As far as agms go, this is 10 00:00:35,159 --> 00:00:38,400 Speaker 1: a big week. Telstra's holding it and you'll get together today. 11 00:00:38,680 --> 00:00:42,000 Speaker 1: They've got more than a million shareholders Telstra Tomorrow's Commonwealth Bank. 12 00:00:42,240 --> 00:00:45,960 Speaker 1: Stephen mab is the chair of the Australian Shareholders' Association. 13 00:00:46,120 --> 00:00:47,520 Speaker 1: Steve and welcome to Fear and Greed. 14 00:00:48,000 --> 00:00:49,680 Speaker 2: You know, Sean, thanks very much for having me. 15 00:00:50,159 --> 00:00:53,760 Speaker 1: Why is voting so important? So I'm a small retail shareholder, 16 00:00:54,040 --> 00:00:55,080 Speaker 1: why should I vote? 17 00:00:55,720 --> 00:00:57,840 Speaker 2: Yeah, Look, it's a good question. And the truth is 18 00:00:57,880 --> 00:01:00,639 Speaker 2: most people don't vote because it's pretty hard and it's 19 00:01:00,640 --> 00:01:03,360 Speaker 2: pretty complicated, and I'm going to read this big, difficult 20 00:01:03,440 --> 00:01:06,560 Speaker 2: report but why should you vote, Because if you don't, 21 00:01:06,680 --> 00:01:09,039 Speaker 2: what happens is the chair of the meeting normally will 22 00:01:09,080 --> 00:01:12,720 Speaker 2: vote your shareholding for you, and often that's not necessarily 23 00:01:12,720 --> 00:01:15,040 Speaker 2: going to be in your best interest. If the chair 24 00:01:15,160 --> 00:01:17,119 Speaker 2: or the board want to do something that maybe isn't 25 00:01:17,120 --> 00:01:21,280 Speaker 2: great for you as an individual shareholder, it's probably better 26 00:01:21,319 --> 00:01:23,120 Speaker 2: to go. And if you're not going to vote, to 27 00:01:23,160 --> 00:01:25,560 Speaker 2: allocate your proxy to someone that would do that for you. 28 00:01:25,640 --> 00:01:28,000 Speaker 2: All sounds a bit complicated, but basically it just means 29 00:01:28,000 --> 00:01:30,480 Speaker 2: that you're giving someone else the right to vote for 30 00:01:30,520 --> 00:01:31,840 Speaker 2: you on that particular day. 31 00:01:32,160 --> 00:01:34,039 Speaker 1: So just go into that a little bit more. 32 00:01:34,120 --> 00:01:34,280 Speaker 2: So. 33 00:01:34,440 --> 00:01:36,120 Speaker 1: Let's say I'm not going to turn up on the 34 00:01:36,200 --> 00:01:38,760 Speaker 1: day and for some reason I can't do it remotely. 35 00:01:38,840 --> 00:01:40,360 Speaker 1: That might be because I can't do it or the 36 00:01:40,360 --> 00:01:43,440 Speaker 1: company's not providing those services, but I do want to 37 00:01:43,440 --> 00:01:45,600 Speaker 1: have a say, and I do know that there are 38 00:01:45,640 --> 00:01:49,320 Speaker 1: proxy firms and organizations that can help me out. So 39 00:01:49,440 --> 00:01:50,760 Speaker 1: just explain how that works. 40 00:01:51,520 --> 00:01:54,760 Speaker 2: Yeah, So there's the what we call the big proxy advisors, 41 00:01:54,800 --> 00:01:58,160 Speaker 2: and they basically charge a fee and advise you big 42 00:01:58,200 --> 00:02:01,000 Speaker 2: super funds or big fun matter which, etc. On how 43 00:02:01,000 --> 00:02:03,840 Speaker 2: they should vote. If those folks aren't inclined to figure 44 00:02:03,840 --> 00:02:06,760 Speaker 2: it out for themselves. It's a great service, but it's expensive. 45 00:02:06,800 --> 00:02:09,119 Speaker 2: It's not something the average person can access. So that's 46 00:02:09,120 --> 00:02:12,520 Speaker 2: really where the Shareholders Association comes in. We've got a 47 00:02:12,520 --> 00:02:15,000 Speaker 2: couple of hundred volunteers all around the country that are 48 00:02:15,080 --> 00:02:18,880 Speaker 2: individual shareholders themselves, and they'll dig into the annual report, 49 00:02:18,960 --> 00:02:21,320 Speaker 2: they'll dig into the resolutions that are being put to 50 00:02:21,360 --> 00:02:25,000 Speaker 2: shareholders at the AGM or the EGM and work out 51 00:02:25,320 --> 00:02:28,560 Speaker 2: what is in your best interest as an individual shareholder. 52 00:02:28,840 --> 00:02:31,519 Speaker 2: So from there, when you get your notice of meeting 53 00:02:31,639 --> 00:02:33,440 Speaker 2: or the email or the letter in the mail that 54 00:02:33,560 --> 00:02:36,080 Speaker 2: says hey, the AGM's coming up, it's time to vote, 55 00:02:36,320 --> 00:02:38,600 Speaker 2: all you really need to do is write in Australian 56 00:02:38,639 --> 00:02:43,000 Speaker 2: Shareholders Association in the proxy box and then the share 57 00:02:43,000 --> 00:02:45,880 Speaker 2: Registry will get that information from you. We don't know 58 00:02:45,919 --> 00:02:48,040 Speaker 2: who you are, it's all anonymous. We just get a 59 00:02:48,040 --> 00:02:50,560 Speaker 2: big report at the end of the process where the 60 00:02:50,560 --> 00:02:53,320 Speaker 2: share Registry says to us, this is how many votes 61 00:02:53,360 --> 00:02:56,200 Speaker 2: you've been allocated or how many shareholders you've been allocated, 62 00:02:56,760 --> 00:03:00,519 Speaker 2: and we go to the meeting. We'll vote accordingly, and 63 00:03:01,040 --> 00:03:03,079 Speaker 2: also right up a report after the meeting as well 64 00:03:03,080 --> 00:03:05,440 Speaker 2: and let everyone know how it went. And basically the 65 00:03:05,480 --> 00:03:08,320 Speaker 2: way we're voting is figured out by our team of 66 00:03:08,400 --> 00:03:11,800 Speaker 2: volunteers across the country and and our management team. And 67 00:03:11,840 --> 00:03:14,600 Speaker 2: again they're really looking at is what's being put to 68 00:03:14,600 --> 00:03:17,480 Speaker 2: you in your best interests as a small shareholder. Is 69 00:03:17,520 --> 00:03:20,520 Speaker 2: it a good board, is it a fair remuneration plan 70 00:03:20,639 --> 00:03:23,600 Speaker 2: for the management team if they're raising capital, have they 71 00:03:23,600 --> 00:03:26,800 Speaker 2: treated you fairly? All those kinds of things. Sometimes it's gray, 72 00:03:27,080 --> 00:03:28,960 Speaker 2: but most of the time a bit like flip Freer 73 00:03:28,960 --> 00:03:30,560 Speaker 2: and greed. We try and make it black and white 74 00:03:30,560 --> 00:03:31,240 Speaker 2: wherever we can. 75 00:03:32,120 --> 00:03:38,160 Speaker 1: So, oh, excellent, yes of the tagline. So just to 76 00:03:38,280 --> 00:03:41,760 Speaker 1: me with the Shareholders Association, So, how many agms do 77 00:03:41,800 --> 00:03:42,600 Speaker 1: you cover in a year? 78 00:03:43,040 --> 00:03:45,000 Speaker 2: Yeah, look, it's a good question. We'd love to cover 79 00:03:45,480 --> 00:03:48,960 Speaker 2: every listed company, but unfortunately most of our work's done 80 00:03:49,000 --> 00:03:52,800 Speaker 2: by volunteers. So most years we cover around two hundred 81 00:03:52,840 --> 00:03:56,440 Speaker 2: to three hundred companies in some format. Typically it's the 82 00:03:56,480 --> 00:03:59,040 Speaker 2: biggest companies that we prioritize because that's where you have 83 00:03:59,120 --> 00:04:02,080 Speaker 2: the most shareholders in the most amount of money invested. 84 00:04:02,520 --> 00:04:04,560 Speaker 2: And then once we run out of volunteers, that's when 85 00:04:04,600 --> 00:04:06,800 Speaker 2: it starts to cut off. But Basically that top two 86 00:04:06,840 --> 00:04:10,360 Speaker 2: hundred to three hundred companies most years is who will 87 00:04:10,360 --> 00:04:13,320 Speaker 2: cover and will vote, and we'll write reports on and 88 00:04:13,400 --> 00:04:15,400 Speaker 2: they're all free to access on our website. You don't 89 00:04:15,400 --> 00:04:17,520 Speaker 2: even need to be a member to give us give 90 00:04:17,600 --> 00:04:19,440 Speaker 2: us your vote if you're not voting yourself, and you 91 00:04:19,440 --> 00:04:22,159 Speaker 2: can also access those reports on the website and have 92 00:04:22,200 --> 00:04:24,040 Speaker 2: a look at it all for free to make sure 93 00:04:24,080 --> 00:04:25,640 Speaker 2: you're happy with how we're planning to vote. 94 00:04:25,640 --> 00:04:28,160 Speaker 1: If you're inclined, I mean, you gave us a plug. 95 00:04:28,160 --> 00:04:29,760 Speaker 1: I'm giving you a plug because it is definitely a 96 00:04:29,760 --> 00:04:32,960 Speaker 1: fantastic service. If you're a retail shareholder, it's worth, if 97 00:04:32,960 --> 00:04:35,279 Speaker 1: nothing else, just going to the website and having a look. 98 00:04:35,520 --> 00:04:37,880 Speaker 1: So what are some of the key themes you're seeing 99 00:04:38,560 --> 00:04:41,120 Speaker 1: at agms? What do you expect to see this year? 100 00:04:41,400 --> 00:04:43,920 Speaker 1: There's been plenty about remuneration obviously in the last couple 101 00:04:43,960 --> 00:04:45,800 Speaker 1: of years, to expect that to continue. What else do 102 00:04:45,800 --> 00:04:46,680 Speaker 1: you expect to see? 103 00:04:47,000 --> 00:04:49,560 Speaker 2: Yeah, absolutely, I mean remuneration is always a big one. 104 00:04:49,600 --> 00:04:52,400 Speaker 2: Every year there's a focus on remuneration, and there'll be 105 00:04:52,400 --> 00:04:56,040 Speaker 2: a handful of companies that maybe have remuneration plans that 106 00:04:56,080 --> 00:04:59,320 Speaker 2: aren't fair or aren't being allocated fairly in our view, 107 00:05:00,040 --> 00:05:03,360 Speaker 2: we'll probably vote against some remuneration reports at those companies 108 00:05:03,400 --> 00:05:05,960 Speaker 2: where we don't think things are being done in the 109 00:05:06,040 --> 00:05:08,760 Speaker 2: right way. That's always the thing. The directors are the 110 00:05:08,800 --> 00:05:11,480 Speaker 2: other big one. You know, Shareholders get to vote on directors, 111 00:05:11,560 --> 00:05:13,960 Speaker 2: whether you want them elected or not or re elected, 112 00:05:14,279 --> 00:05:16,360 Speaker 2: and we look at that really closely every year because 113 00:05:16,400 --> 00:05:19,320 Speaker 2: the way that a board works, and you know the 114 00:05:19,440 --> 00:05:22,400 Speaker 2: role of the board is really important to an independent 115 00:05:22,480 --> 00:05:24,400 Speaker 2: or a regular shareholder. You want to make sure that 116 00:05:24,440 --> 00:05:27,560 Speaker 2: those directors are looking after all of the stakeholders, not 117 00:05:27,640 --> 00:05:30,560 Speaker 2: just the management team or maybe the major shareholders. So 118 00:05:30,600 --> 00:05:33,039 Speaker 2: we look at the director elections really closely, and of 119 00:05:33,080 --> 00:05:34,719 Speaker 2: course we'll be doing that again this year. 120 00:05:35,360 --> 00:05:37,440 Speaker 1: Stay with me, Steve, and we'll be back in a minute. 121 00:05:44,200 --> 00:05:49,680 Speaker 1: I'm speaking to Stephen mab chair of the Australian Shareholders Association. Okay, 122 00:05:49,720 --> 00:05:54,080 Speaker 1: what about the way that agms changed during COVID They 123 00:05:54,120 --> 00:05:56,080 Speaker 1: all went online and at the time I was winking 124 00:05:56,080 --> 00:05:58,280 Speaker 1: for a big corporate and the running round we had 125 00:05:58,279 --> 00:06:00,760 Speaker 1: to do to try and ensure that we could get 126 00:06:00,760 --> 00:06:04,480 Speaker 1: the AGM out to shareholders. Has that remained that way? 127 00:06:04,520 --> 00:06:06,479 Speaker 1: It just seems there's a bit of shift back to 128 00:06:06,520 --> 00:06:08,000 Speaker 1: the in person agms. 129 00:06:08,560 --> 00:06:12,760 Speaker 2: Yeah, that's right. Everyone had to go online during COVID obviously, 130 00:06:12,800 --> 00:06:16,280 Speaker 2: and i ASIK relax the rules a little bit during 131 00:06:16,320 --> 00:06:18,560 Speaker 2: that period so that companies could do that even if 132 00:06:18,560 --> 00:06:22,440 Speaker 2: it wasn't in their constitutions. But we have seen a 133 00:06:22,480 --> 00:06:25,279 Speaker 2: return to in person meetings, which is great. We love 134 00:06:25,279 --> 00:06:27,799 Speaker 2: in person meetings. We want to make sure that childers 135 00:06:27,839 --> 00:06:29,719 Speaker 2: can still turn up and talk to their boards and 136 00:06:29,720 --> 00:06:32,920 Speaker 2: their management teams at a meeting at least once a year. 137 00:06:33,440 --> 00:06:36,279 Speaker 2: But what we've also seen is the company is dropping 138 00:06:36,279 --> 00:06:38,760 Speaker 2: some of the online part of it, either only holding 139 00:06:38,760 --> 00:06:41,520 Speaker 2: it as a webcast where you can just view what's 140 00:06:41,520 --> 00:06:44,440 Speaker 2: happening but not actually vote or question in real time, 141 00:06:44,880 --> 00:06:47,159 Speaker 2: or maybe getting rid of the online portion altogether and 142 00:06:47,200 --> 00:06:50,320 Speaker 2: only having the physical meeting. We don't think that's great. 143 00:06:50,480 --> 00:06:52,799 Speaker 2: You know, there's a lot of agms happening at the moment, 144 00:06:52,839 --> 00:06:54,880 Speaker 2: as you know, so even if you're inclined to go 145 00:06:54,920 --> 00:06:57,920 Speaker 2: to every AGM in person, sometimes it's just not possible 146 00:06:57,920 --> 00:06:59,479 Speaker 2: because they're on the same day at the same time 147 00:06:59,480 --> 00:07:02,640 Speaker 2: in two locations. And secondly, there's a lot of people 148 00:07:02,640 --> 00:07:05,400 Speaker 2: that don't want to travel all across the country to 149 00:07:05,480 --> 00:07:08,560 Speaker 2: an AGM for one or two hours. So we love 150 00:07:08,600 --> 00:07:11,200 Speaker 2: the hybrid meeting. That's where you have the online meeting 151 00:07:11,240 --> 00:07:13,480 Speaker 2: of course, but you also have the ability to join 152 00:07:13,520 --> 00:07:18,080 Speaker 2: the meeting online, vote ask questions online as well, and 153 00:07:18,160 --> 00:07:22,480 Speaker 2: participate wherever you are in Australia. ASA runs those kind 154 00:07:22,520 --> 00:07:24,560 Speaker 2: of meetings every year where and it's small, not for profit. 155 00:07:24,600 --> 00:07:27,160 Speaker 2: It's not that hard, it's not that expensive. So we're 156 00:07:27,200 --> 00:07:30,559 Speaker 2: really pushing the companies hard to continue the hybrid meeting 157 00:07:30,920 --> 00:07:33,600 Speaker 2: and make sure that they allow our shareholders to participate 158 00:07:33,920 --> 00:07:36,720 Speaker 2: all across Australia wherever they are, either in person or 159 00:07:36,760 --> 00:07:37,840 Speaker 2: at home on their computers. 160 00:07:38,600 --> 00:07:41,400 Speaker 1: Broadly, do you think Corporate Australia is doing a good 161 00:07:41,480 --> 00:07:45,400 Speaker 1: job looking after all investors? And I suppose my emphasis 162 00:07:45,440 --> 00:07:49,520 Speaker 1: on all means retail investors rather than just institutional investors. 163 00:07:50,320 --> 00:07:54,360 Speaker 2: Yeah. Look, we've got around two thousand listed companies in Australia, 164 00:07:54,440 --> 00:07:56,920 Speaker 2: so of course with a number that big, you're going 165 00:07:56,960 --> 00:07:59,040 Speaker 2: to have some folks that are doing it well and 166 00:07:59,080 --> 00:08:03,000 Speaker 2: then others that maybe aren't. Obviously, the bigger the companies get, 167 00:08:03,120 --> 00:08:07,080 Speaker 2: generally speaking, the better their governance gets, the better they communicate, 168 00:08:07,160 --> 00:08:10,080 Speaker 2: the better that they treat their retail shareholders where we 169 00:08:10,240 --> 00:08:12,840 Speaker 2: tend to see, you know, some of the biggest gaps. 170 00:08:12,840 --> 00:08:15,240 Speaker 2: So when you've had a small company that's growing very quickly, 171 00:08:15,280 --> 00:08:17,480 Speaker 2: maybe it's product or its service has got pretty hot 172 00:08:18,240 --> 00:08:21,640 Speaker 2: and it's rapidly shot up the market cap, and then 173 00:08:21,680 --> 00:08:25,400 Speaker 2: you'll start to get some more coverage and we'll maybe 174 00:08:25,400 --> 00:08:27,640 Speaker 2: cover them for the first time, and there's often a 175 00:08:27,640 --> 00:08:29,320 Speaker 2: bit of work to do there where they're boord or 176 00:08:29,360 --> 00:08:32,439 Speaker 2: their ammuneration or the capital raising process hasn't been great. 177 00:08:33,000 --> 00:08:35,360 Speaker 2: But we find most of the companies are pretty responsive 178 00:08:35,400 --> 00:08:37,800 Speaker 2: when the ASA starts to engage with them. They at 179 00:08:37,880 --> 00:08:40,280 Speaker 2: least are willing to listen and hear us out and 180 00:08:40,320 --> 00:08:43,559 Speaker 2: where it makes sense for them to make those changes 181 00:08:43,600 --> 00:08:46,280 Speaker 2: over time. So even with those kind of midd or 182 00:08:46,320 --> 00:08:49,360 Speaker 2: smaller cap companies, I guess you'd say we do see 183 00:08:49,440 --> 00:08:51,800 Speaker 2: progress when you start to engage with them. It's not 184 00:08:51,840 --> 00:08:55,760 Speaker 2: always intentional that they're not treating their retail shareholders as 185 00:08:55,800 --> 00:08:57,960 Speaker 2: well as they could. Sometimes it's just that they haven't 186 00:08:57,960 --> 00:09:01,400 Speaker 2: really engaged them, and we understand it hard. If you've 187 00:09:01,440 --> 00:09:04,560 Speaker 2: got a million shareholders like Telstra does, for example, you 188 00:09:04,679 --> 00:09:07,240 Speaker 2: can't sit down and speak to them all individually, and 189 00:09:07,280 --> 00:09:09,520 Speaker 2: that's where the Shareholders Association can come in as a 190 00:09:09,520 --> 00:09:12,120 Speaker 2: bit of a voice and a centralized voice to represent 191 00:09:12,160 --> 00:09:13,240 Speaker 2: that group with the company. 192 00:09:13,600 --> 00:09:15,600 Speaker 1: So Telstra's the biggest one, I suppose and come off 193 00:09:15,600 --> 00:09:17,480 Speaker 1: bank will is it be pretty big? I mean, which 194 00:09:17,520 --> 00:09:20,400 Speaker 1: are the biggest agms in terms of people who use 195 00:09:20,480 --> 00:09:21,640 Speaker 1: the Shareholders Association? 196 00:09:22,320 --> 00:09:25,760 Speaker 2: Yeah? They are. I mean Telstra's got hundreds of thousands 197 00:09:25,760 --> 00:09:29,840 Speaker 2: of retail shareholders, as do the big Bangs, as does BHP, 198 00:09:30,080 --> 00:09:32,840 Speaker 2: as does Rio Tinto. You know, the bigger the company gets, generally, 199 00:09:32,840 --> 00:09:36,520 Speaker 2: the more retail shareholders they have. And it is AGM season, 200 00:09:36,559 --> 00:09:38,800 Speaker 2: so there's lots of those meetings going on at the moment. 201 00:09:39,280 --> 00:09:40,559 Speaker 2: You know, if you go to one of those really 202 00:09:40,600 --> 00:09:43,800 Speaker 2: big agms, you'll often see hundreds and hundreds of people 203 00:09:44,200 --> 00:09:47,280 Speaker 2: in the audience. Most people don't ask questions, so that's 204 00:09:47,320 --> 00:09:50,080 Speaker 2: where the ASA jumps in again and tries to ask 205 00:09:50,160 --> 00:09:52,240 Speaker 2: questions at the meeting to get get the answers on 206 00:09:52,320 --> 00:09:55,800 Speaker 2: record and represent retail shareholders that have both given us 207 00:09:55,840 --> 00:09:59,240 Speaker 2: their proxy, but also other retail shareholders that maybe aren't 208 00:09:59,280 --> 00:10:01,760 Speaker 2: either there or confident enough to get up and ask 209 00:10:01,800 --> 00:10:02,960 Speaker 2: a question of the chair. 210 00:10:03,120 --> 00:10:06,280 Speaker 1: Final question, Steven, which AGM has the best food afterwards? 211 00:10:07,520 --> 00:10:11,120 Speaker 2: That is a great question. I haven't been to them all. 212 00:10:11,320 --> 00:10:13,720 Speaker 2: I would say Nick Scarle's is pretty good. I was 213 00:10:15,960 --> 00:10:19,400 Speaker 2: small size or small to mid cap furniture retailer. They 214 00:10:19,440 --> 00:10:22,760 Speaker 2: put on a fantastic spread. But I haven't been to 215 00:10:22,800 --> 00:10:24,760 Speaker 2: every AGEM in the country, so it's not a not 216 00:10:24,800 --> 00:10:26,520 Speaker 2: a fully quite qualified answer. 217 00:10:26,960 --> 00:10:28,680 Speaker 1: Fair enough, Stephen, thank you for talking to Fear and 218 00:10:28,720 --> 00:10:29,800 Speaker 1: Greed My pleasure. 219 00:10:29,840 --> 00:10:30,960 Speaker 2: Thanks very much for having a Sean. 220 00:10:31,480 --> 00:10:34,679 Speaker 1: That was Stephen mab Chair of the Australian Shareholders Association. 221 00:10:34,840 --> 00:10:37,040 Speaker 1: This is the Fear and Greed Business Interview. Join us 222 00:10:37,040 --> 00:10:39,240 Speaker 1: every morning for the full episode of Fear and Greed 223 00:10:39,520 --> 00:10:41,920 Speaker 1: Business JEWS for people who make their own decisions. I'm 224 00:10:41,960 --> 00:10:48,040 Speaker 1: Sean alma Enjoy your day.