23 Jul 2012
Company Secretary’s Update
Federal Government clarifies chair’s ability to vote undirected proxies on a Remuneration Report resolution
The Corporations Amendment (Proxy Voting) Act 2012 (Cth) has commenced in time for 2012 AGMs. The legislation which was given royal assent on 27 June 2012 amends the Corporations Act 2001 (Cth) (Act) to clear up confusion surrounding proxy voting by the chair of a meeting with respect to the Remuneration Report.
Confusion arose out of amendments made to the Act last year which imposed voting restrictions on the Key Management Personal (KMP) and their closely related parties with respect to the Remuneration Report. It was unclear whether an exception which allowed the chair to vote undirected proxies where the shareholder had expressly authorised the chair to exercise the proxy, applied to the non-binding vote for the adoption of the Remuneration Report.
The amending legislation clarifies the issue by enabling the chair of an AGM to vote undirected proxies on the Remuneration Report if:
(a) the vote is not cast on behalf of a KMP member whose remuneration details are included in the Remuneration Report, or a closely related party of such a member, and
(b) the proxy appointment expressly authorises the chair to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a KMP member.
This means that the measures taken last year to address the confusion in the Act when preparing proxy forms for AGMs are no longer required. In particular, it will not be necessary to alter the proxy form to require the shareholder to 'tick a box' so as to make the Remuneration Report resolution a directed proxy.
However, it will be necessary for companies to review their proxy forms to ensure the chair is given express authority by shareholders to vote undirected proxies on the Remuneration Report.