Australia’s 2024 annual general meeting (AGM) season continued to see significant shareholder dissent on remuneration reports, with 40 S&P/ASX300 constituents recording ‘strikes’ of more than 25% opposition. This closely mirrors the tumultuous 2023 season, which featured 41 such votes, marking a sharp departure from the range of 22–26 strikes observed between 2018 and 2022.

Strikes of over 40% opposition remained significant, with 17 such cases in 2024. While this is a decline from the 24 recorded in 2023, it is still considerably higher than the mere 5 instances seen in 2022.

S&P/ASX300 Strikes

A notable trend is the increase in second or higher consecutive strikes, with 13 companies facing such outcomes in 2024—accounting for 33% of all strikes. This marks a significant rise from the 5 companies recorded in both 2023 and 2022, representing 12% and 23% of total strikes, respectively. This shift suggests that boards may be struggling to adequately address shareholder concerns and are facing heightened expectations regarding how they should respond to dissent.

On the other hand, the rise in consecutive strikes may also indicate that some boards are more willing to accept shareholder opposition, especially if doing so helps retain key executives. This is supported by the fact that none of the board spill proposals that went to a vote in 2024 received more than 20% in favour, indicating that the risk of triggering a board spill over remuneration concerns remains low. This dynamic may reflect a more pragmatic approach by boards, balancing shareholder opposition with the strategic need to maintain leadership continuity.

We identified the following overarching themes as the primary drivers of the 2024 strikes:

  • Perceived preferential treatment of executives: Shareholders remain concerned about executives receiving favourable treatment, particularly in the context of poor shareholder returns. This often involves the use of retention awards and seemingly unjustified incentive payouts. Notably, the use of upward discretion was not a common theme this year, suggesting that boards may be increasingly attuned to investor concerns in this area.
  • Flawed or underdeveloped remuneration structures: A significant number of strikes continues to be driven by remuneration structures that are underdeveloped, overly discretionary, or poorly designed. Common issues include LTI plans with short, one-year performance periods and incentive structures that fail to create sufficient alignment between executives and shareholders, often lacking meaningful ‘skin in the game’ mechanisms.
  • Unchallenging long-term financial targets: Shareholders are increasingly scrutinizing the financial hurdles set under LTI plans. There is a growing expectation that these targets should reflect market conditions and align with analyst forecast consensus. Targets perceived as too lenient have faced significant pushback.
  • Excessive remuneration packages: Generous executive pay, including increases in fixed remuneration and incentive opportunities, continues to face shareholder opposition. These concerns are particularly pronounced when such increases are not accompanied by clear and demonstrable improvements in company performance or are awarded to executives who already receive substantial compensation.
  • Headline risk: Shareholders continue to use remuneration votes to voice their dissatisfaction with the broader governance issues and the emergence of headline risk and the potential reputational damage.

Strike Drivers

Other Remuneration-Related Opposition Votes

While other proposals often get less attention than the remuneration report votes, we note that there are instances of shareholder dissent against equity grants and similar proposals that were not accompanied by a strike against the remuneration report.

During 2024, 16 ASX300 constituents that did not face a strike on their remuneration report vote nonetheless saw 25% or more votes cast against equity grant proposals (to executive directors and/or non-executive directors), and one saw such dissent at a proposal to approve termination benefits.

Looking For More?

Glass Lewis’ 2024 Australia & New Zealand Proxy Season Review and 2024 Australia Proxy Statistics reports offer detailed analysis of the remuneration and governance issues that drove shareholder voting at annual general meetings (AGMs) this year. The Review sets out the key trends along with a company-by-company breakdown of all remuneration report and director election proposals that received significant opposition, while the Proxy Statistics provides comprehensive charts and tables illustrating the makeup of the S&P/ASX300 index, trends in board composition and remuneration practices, and shareholder voting outcomes.

The 2024 Australia & New Zealand Proxy Season Review and 2024 Australia Proxy Statistics are available to Glass Lewis clients on Viewpoint and GovernanceHub, or by contacting your Client Service representative. Non-clients can read the Executive Summary here.