The 2024 AGM Season brought heightened drama as companies faced escalating shareholder dissent hitting a historic record, with 15% of ASX 300 companies receiving strikes on their remuneration reports, up slightly from 13% in 2023. An additional 12% of companies narrowly avoided strikes, reflecting more widespread dissatisfaction. 

 

Key highlights

 

• Strike Increase: 39 companies (vs. 33 in 2023) faced strikes, representing over 25% of eligible shareholders voting against their remuneration reports. Near misses (15-25% dissent) decreased slightly, compared to 2023 (31 companies). 

• Historical Highs: Over a quarter of ASX 300 companies recorded more than 15% dissent on remuneration reports, the highest level since the “Two Strikes Rule” began in 2011. 

 

Standout Themes

 

CEO Remuneration Under Fire 

Investor dissatisfaction centred on the size and structure of CEO pay, particularly variable incentives that were seen as excessive or poorly aligned with performance. Long-term incentives (LTIs) drew criticism for lenient metrics or timelines, while governance lapses in determining pay outcomes added to frustrations. 

 

Notable Companies with High Dissent 

 

• Mineral Resources Limited: 75% ‘no vote’, citing governance issues (first strike). 

• Lovisa Holdings Limited: 74% ‘no vote’ (second strike). 

• Elders Limited: 68% ‘no vote’ (second strike). 

 

Sector Analysis

 

• Health Care: Strikes surged to 30% in 2024, up from 8% in 2023, due to concerns over excessive CEO pay and lenient performance targets. Despite talent retention challenges, shareholders viewed these increases as unjustified. 

• IT: Strike prevalence dropped significantly to 17% in 2024, compared to 33% in 2023, reflecting improved alignment between pay and performance metrics. Companies in this sector moved away from uncapped cash bonuses and focused on growth with measurable outcomes. 

• Communication Services: This sector saw an increase in strikes, reaching 17% in 2024 from 0% in 2023. Shareholders expressed growing concerns over broader executive pay practices and their potential governance implications on decision making. 

• Energy and Materials: These sectors maintained the lowest strike rates at 6% and 10%, respectively. Materials improved from 20% in 2023 due to strengthened governance practices and better pay-performance alignment. 

 

Figure 2: ‘Strike’ outcomes by Sector (2024 vs 2023) 

 

Trends in Shareholder Behaviour

Correlation Between Strikes and Market Cap 

• Large-Cap Companies: Strikes among large-cap companies (≥ $1bn) slightly decreased in prevalence from 2023 but still dominated the tally, accounting for nearly 75% of strikes in 2024. Among these, 42% experienced dissent rates between 40-75%, reflecting ongoing dissatisfaction with excessive CEO pay and incentive plans. 

• Mid-Large Cap Companies: Strikes among mid-large cap companies rose compared to 2023 driven by shareholder concerns over misalignment between pay and company performance. 

 

Figure 3: Distribution of strikes received by market cap (2024 vs 2023) 

Perennial Offenders

Since the introduction of the “Two Strike” rule legislation, a growing number of companies have received consecutive strikes. The number of companies receiving second strikes doubled from 5 in 2023 to 10 in 2024, with all Boards avoiding a spill vote. We note that for some companies the strike percentage has been significant in both years (greater than 50%), potentially indicating a systemic issue regarding executive pay outcomes vs shareholder expectations. 

Perennial offenders include the following companies who have received more than two consecutive strikes.  These include:  

• Dicker Data: 2021 – 2024 

• Lovisa: 2019, 2021 – 2024 

• NRW Holdings: 2018 – 2024 

Although the strike counter resets after two consecutive strikes, questions remain about how these companies address persistent shareholder concerns. Proxy advisor influence was noted, underscoring the need for companies to transparently explain their remuneration decisions and deviations from advisory guidelines. 

 

Looking Ahead

Shareholders continue to demand transparency and strong alignment between executive pay and performance. Heading into the 2025 AGM season, companies should: 

• Engage proactively and timeously with shareholders to address concerns. 

• Disclose detailed rationales for pay decisions, particularly when deviating from proxy advisor recommendations. 

• Consider external remuneration advisors, such as TRP, to align pay practices with performance metrics. 

The 2024 AGM season’s record dissent reflects shareholders’ growing resolve to hold companies accountable, signalling that robust governance and transparent communication are critical to fostering investor trust. 

With over 60% of ASX 300 companies holding their 2024 Annual General Meetings (AGMs) to date, 2024 appears likely to exceed last year’s record number of “strikes” on Remuneration Reports.

Figure 1 below provides a year-on-year comparison of the percentage of ASX300 companies which have received a “strike” (greater than 25% of eligible shareholders voting against) or a “near miss” (between 15% to 25% of eligible shareholders voting against) on their Remuneration Report.

 

Figure 1: Voting outcomes in 2024 (so far), compared to the previous five years

Tis the Season (of Strikes)

Looking at the strikes received to date, while 22 companies were handed their first strike, 8 faced a second strike. Second strikes require Board members to stand for re-election at a further special meeting, via a ‘spill’ vote. Fortunately, in all instances, companies who received their second strike were able to avoid ‘spill’ votes.

The prevailing focal points for “strikes” on Remuneration Reports in the AGM season so far appear to revolve primarily around generous remuneration packages relative to company performance; soft incentive targets; and opaque report disclosures. These key themes reflect the ongoing challenges associated with aligning remuneration outcomes to company performance and shareholder expectations.

 

Below are some examples to provide insight into shareholders’ rebukes:

 

• Perpetual Limited (88% no vote, “First Strike”): Shareholders expressed vehement dissatisfaction around excessive executive pay and retention bonuses (which in some cases, amounted to over 200% of salary). Proxy advisors noted cash retention payments were materially inconsistent with company performance and accepted market practice.
• Goodman Group (35% no vote, “First Strike”): Proxy Advisors indicated that the hurdles to awarding Performance Rights under the company’s Long Term Incentive scheme were “insufficiently challenging”, also citing the approach to excluding share-based payments from the EPS calculation as “unique”.
• Dicker Data Limited (42% no vote, “Fourth Consecutive Strike”): Shareholder concerns included uncapped cash bonuses, short vesting periods for performance-related incentives (assessed and paid either monthly or quarterly) , as well as the CEO’s fixed pay being above the median, relative to peers.

Sector Analysis – Healthcare leading the charge (but early days for Energy & Materials)

Looking at the Remuneration Report voting by sector, leading the ”strikes” to date are Health Care companies (26% have received a ”strike”) followed by Information Technology (17%). Whilst some sectors such as Energy and Materials have received the lowest level of ”strikes”, this may be premature given that more than half of the companies are yet to hold their AGM.

 

Figure 2 below highlights the percentage of companies per sector which have held their AGM (indicated by the grey bars). The red bars indicate the percentage of ”strikes” received by sector.

 

Figure 2: Voting outcomes in 2024 (so far), by Sector

 

TRP will continue to monitor the remuneration report voting and will publish further updates over the coming weeks.

As the AGM season hits full swing, we have conducted research to understand what actions (if any) have been taken by ASX300 Companies that received a ‘strike’ on their Remuneration Report in 2023.  This year involves more work than usual, with a whopping 13% of ASX 300 companies receiving strikes last year – the largest since the legislation was introduced in 2012.

Of the 31 companies who have responded to a strike from last year so far, 26 (84%) have made changes to address either some or all of the concerns raised by shareholders and / or proxy advisor groups. The remaining five companies have not indicated any changes in response to the shareholder concerns (Harvey Norman, BrainChip Holdings, John Lynas, Lovisa Holdings and Dicker Data Limited). Interestingly, Lovisa Holdings and Dicker Data have received consecutive strikes in 2022 and 2023 and the Board has not made any remuneration changes to address concerns in either year.

Note: it is a requirement under the Corporations Act 2001 that the company’s remuneration report include either a description of the actions the Board intends to take in response to a ‘strike’ or an explanation of the reasons for taking no action. See below for details on the 2 Strikes Law.

Strike Responses Tracker

Company responses to ‘strikes’ in 2023 comprised of multiple changes (up to five) to address shareholder concerns (perceived or known).  As an example, to strengthen performance and reward alignment, changes were made to performance measures and weighting, deferral of awards were introduced, and Boards exercised discretion to modify incentive outcomes.  Companies also enhanced transparency in their remuneration practices by providing additional disclosure of group-level targets, and detailed information regarding key performance indicators (KPIs).

The chart below provides a summary of the response themes adopted by companies to the ‘strike’ on their Remuneration Report over the last two years.  Changes to variable pay structure was by far the most common lever adopted by Boards in response to a strike in 2023.

 

 

Examples of the responses include:

1. Change to variable pay structure: change in weighting (AMP Ltd increasing the weighting of financial metrics from 40% to 60%), change in performance metrics (replace absolute total shareholder return to relative shareholder return), increasing the LTI performance period (Atlas Arteria Ltd from 3 years to 4 years), increasing deferral of short term incentive (Magellan Financial Group, Bank of Queensland, Fortescue Metals Group).
2. Change to quantum: exercise of Board discretion to modify downward incentive outcomes (Perenti, Sandfire, Qantas), reducing the Non-Executive Director base and committee fees (Tabcorp), reducing the quantum of variable remuneration awards (Platinum Investment Management).
3. Enhanced governance:  extension of minimum shareholding policy to executives (Nufarm), development of policy for treatment of awards upon termination (Core Lithium), introduction of malus/clawback policy (Lake Resources).
4. Changes to disclosure: providing additional disclosure on incentive targets and outcomes (APA Group, Clinuvel Pharmaceuticals, Whitehaven Coal), enhanced disclosure on rationale behind remuneration design (Novonix).

*What is a strike? The 2 Strikes Law If a company’s remuneration report outlining salary and incentives of key management personnel (KMP) receives a ‘no’ vote of 25% or greater from shareholders at the annual general meeting, the company receives a first ‘strike’. If the following year’s remuneration report also receives a ‘no’ vote of 25% or more, the company receives a second ‘strike’. When a second ‘strike’ occurs, shareholders vote then and there to decide whether company directors must stand for re-election. This is known as a ‘spill’ vote. If the spill vote passes (i.e., 50% or more of eligible votes cast), a spill meeting is held within 90 days and the directors stand for re-election. See our blog “10 Years On Does The 2 Strikes Law Really Matter?” for more information.

After a fairly benign AGM season in 2022, ASX300 companies have experienced an unprecedented surge in shareholder ‘no votes’ during 2023, with a record-breaking 13% receiving strikes on their remuneration report and an additional 13% narrowly avoiding the same fate. Certain sectors were particularly impacted feeling the wrath of disgruntled shareholders including Healthcare, Information Technology, and Utilities.

A total of 34 companies received a “strike” (greater than 25% of eligible shareholders voting against).  A further 32 companies received a “near miss” (between 15% to 25% of eligible shareholders voting against), meaning more than one in four of ASX300 AGMs resulted in greater than 15% of eligible shareholders voting against the Remuneration Report.  These voting statistics indicate the lowest level of support for Remuneration Reports since the “two strikes rule” was introduced in 2011.

 

Broader Themes This Year:

Amidst the surge in record no votes among ASX300 companies in 2023, investor concerns are broadening their lens of what defines appropriate company performance. Companies faced strikes due to factors including individual project performance, the absence of marketable products, deficiencies in succession planning, and challenging market conditions. This nuanced evaluation by investors reflects scrutiny extending beyond traditional metrics, emphasising the growing requirement for companies to demonstrate excellence in various aspects of corporate strategy and performance. The diversification of reasons behind shareholder concerns further underscores the evolving landscape of investor engagement and governance expectations.

 

But…The Usual Suspects:

Amid this wave of shareholder activism, traditional themes of concern continued to underpin the voting. Pay and performance misalignment, a lack of perceived stretch in measures and targets, and protest votes against board and company performance have emerged as common themes. Shareholders are increasingly vocal about ensuring that executive remuneration is directly tied to performance metrics that truly reflect the company’s progress and success.

 

Big ‘No Votes’ Send Clear Message to Big Names:

An unprecedented 12 companies in the ASX300 were on the receiving end of substantial ‘no votes’ from over half of their shareholders. Notable names with significant shareholder dissent included Qantas (83% ‘no vote’), Harvey Norman (82% ‘no vote’) and Elders (63% ‘no vote’). Other ‘strike’ recipients included Fortescue (52% ‘no vote’ citing concerns over quantum of remuneration paid to former key management) and Woolworths (28% ‘no vote’ linked to executives receiving their incentives despite the death of two staff in the last 12 months).

 

Sectoral Disparities:

Within the ASX300, the various sectors have faced distinct challenges. Healthcare, Information Technology, and Utilities sectors have been particularly susceptible to shareholder dissatisfaction.

Industrials also took a significant hit, with close to a third of the companies receiving a no vote greater than 15%. This was exemplified by Qantas, where shareholders expressed dissatisfaction with outgoing executives’ incentives and the company’s involvement in reputation-damaging controversies. Meanwhile, NRW Holdings, also in the industrials sector, recorded its sixth consecutive strike with concerns over CEO’s pay. In contrast, the Materials sector performed partially better, with 18% of companies receiving a near miss or a strike.

 

The surge in strikes among ASX300 companies in 2023 signals a seismic shift in corporate governance dynamics. Shareholders are flexing their muscles, demanding greater accountability, transparency, and alignment between performance and executive remuneration.

As the 2023 AGM season is now in full swing, we are tracking shareholder voting on the Remuneration Report for ASX300 companies. To date, a total of 94 ASX300 companies have had shareholders vote on their Remuneration Report.  Figure 1 below shows a year on year comparison of the percentage of ASX300 companies which have received a “strike” (greater than 25% of eligible shareholders voting against) or a “near miss” (between 15% to 25% of eligible shareholders voting against) on their Remuneration Report.  The results to date indicate a reasonable uptick in the number of “strikes” after the strong support received in Remuneration Report voting in 2022.

 

Figure 1. Voting outcomes in 2023 to date compared to prior years

The prevailing focal points for “strikes” on Remuneration Reports in the early stages of the AGM season so far revolve primarily around board discretion, generous incentives and poor remuneration report disclosure. These key themes reflect the ongoing challenges associated with aligning performance, remuneration outcomes, and shareholder expectations. Some examples include:

• Nufarm Limited (47% no vote): Shareholders expressed dissatisfaction with the board’s chosen pay incentive strategies, such as granting a $2.43 million cash Short-Term Incentive (STI) to the Managing Director.
• AMP Limited (49% no vote): Shareholders expressed discontent with the transparency of the short-term incentive targets and found the board’s discretionary award of substantial incentives to be unwarranted, particularly in light of the company’s share price performance.
• ALS Limited (28% no vote): Shareholders deemed the retention payments granted to two senior executives to be unjustified and excessively generous.
• Treasury Wine Estates Limited (46% no vote): Shareholders expressed displeasure with the board’s exercise of discretion, allowing the vesting of long-term incentives even when certain financial targets were not achieved.

Other examples include:

• BrainChip Holdings Limited (52% no vote): A protest vote was registered due to the company’s performance. As the chairman articulated, the company has not yet achieved any substantial progress in terms of generating revenue.
• Atlas Arteria Holdings Limited (51% no vote): A protest vote was cast in opposition to the company’s acquisition of a two-thirds stake in the Chicago Skyway motorway. Shareholders expressed dissatisfaction with the necessary equity raise for this transaction and regarded the acquisition as being made at a price higher than the prevailing market rates.
• Perenti Limited (33% no vote): Although Perenti delivered healthy returns to its shareholders, it received a strike due to apprehensions about safety precautions.

We will continue to provide updates as the majority of AGMs are held over the next month.

Once again we have undertaken research to understand what subsequent actions (if any) have been taken by ASX300 Companies which received a ‘strike’ on their Remuneration Report in 2022.

Of the 16 companies who received a strike last year, 13 (81%) made changes to address either some or all of the concerns raised by shareholders and / or proxy advisor groups. The remaining 2 companies have not indicated any changes in response to the shareholder concerns (Dicker Data Limited and Lovisa Holdings). Note it is a requirement under the Corporations Act 2001 that the company’s remuneration report include either a description of the actions the board intends to take in response to a ‘strike’ or an explanation of the reasons for taking no action.

Strike Responses Tracker

Unlike prior years, company responses to ‘strikes’ in 2022 comprised of multiple changes (up to four) to address shareholder concerns (perceived or known).  As an example, to strengthen performance and reward alignment, changes were made to performance measures and weighting, introduction of minimum shareholding requirements, and the addition of gateways (e.g., EPS, TSR) in long-term incentive plans.  Companies also enhanced transparency in their remuneration practices by providing additional disclosure of group-level targets, principles for applying discretion, and detailed information regarding key performance indicators (KPIs).

The chart below shows the three most common response themes adopted by companies to the ‘strike’ on their Remuneration Report.

 

Examples of the responses include:

1. Change to variable pay structure: change in weighting (Newcrest Mining Ltd increasing the weighting of relative TSR from 33% to 50% and reducing the weighting of both ‘Return on Capital Employed’ and ‘Comparative Cost’ from 33% to 25%), increasing the LTI performance period (Corporate Travel Management Ltd from 2 years to 3 years), the replacement of Options with Restricted Stock Units or Performance Rights (Imugene Ltd).
2. Change to disclosure: providing additional disclosure on group level targets (Downer EDI Ltd), adding more details regarding the STI plan (Lake Resources NL) and including more detailed information in relation to Executive KMP performance (Link Administration Holdings Ltd).
3. Change to quantum: reducing the Non-Executive Director base and committee fees (The Star Entertainment Group Ltd), reducing the quantum of LTI awards by 10% (Goodman Group), setting the fixed remuneration of the new CEO lower than the predecessor’s (Downer EDI Ltd).

*What is a strike? If a company’s remuneration report outlining salary and incentives of key management personnel (KMP) receives a ‘no’ vote of 25% or greater from shareholders at the annual general meeting, the company receives a first ‘strike’. If the following year’s remuneration report also receives a ‘no’ vote of 25% or more, the company receives a second ‘strike’. When a second ‘strike’ occurs, shareholders vote then and there to decide whether company directors must stand for re-election. This is known as a ‘spill’ vote. If the spill vote passes (i.e., 50% or more of eligible votes cast), a spill meeting is held within 90 days and the directors stand for re-election. See our blog “10 Years On Does The 2 Strikes Law Really Matter?” for more information.