June 2014

Proxy Voting Report January to June 2014

1. Proxy Voting in Australia

In the six month period to 30 June 2014:

  • CSC's votes were exercised on 420 resolutions at 85 meetings of 84 companies.
  • CSC abstained on 1 resolution on the advice of CSC's investment managers.
  • The majority of contentious resolutions continue to relate to the election of directors and incentive issues, including remuneration.
  • CSC supported 92% of resolutions put to shareholders by company management.

 

Proxy Voting to June 2014

Key Statistics Jan to Jun
2013
Jul to Dec
2013
Jan to Jun
2014
Number of company meetings where votes were submitted 73 266 84
Number of resolutions voted on 364 1372 420
% of meetings where remuneration reports were considered 66% 89% 59%
% of remuneration reports that were not supported by CSC 6.2% 12% 8%
Total resolutions for a board spill
(in the event of a "second strike") considered
3 13 0
Resolutions for a board spill supported by CSC        0 1 0
% of resolutions where director elections were supported 97% 93% 99%

 

2  Remuneration

CSC supports compensation arrangements for management and directors that are reasonable and fit for the purpose of attracting and rewarding talent for efforts and achievement within their control.  In assessing non-binding resolutions to adopt remuneration reports CSC expects to see clear and concise remuneration reports that disclose all relevant information, facilitate understanding of the company’s remuneration policy and are aligned with shareholder interests.

  • During the period CSC‘s votes were exercised on 50 resolutions seeking support for remuneration reports.  CSC voted against 4 of those reports for failure to meet the expectations outlined above.
  • CSC also voted against specific grants to directors due to insufficiently-explained performance hurdles, large payments not demonstrably aligned with performance and share grants to non-executive directors.

Where a company receives more than 25% of votes against its remuneration report in two consecutive years, the Corporations Act gives shareholders the right to vote on whether an entire board should stand for re-election.  Recent reforms also prohibit key management personnel from voting on the remuneration report and on any two-strikes board spill, as well as from hedging incentive remuneration.  These changes have removed the ability for executives to vote and approve their own pay.

  • CSC voted on 3 spill resolutions during the period, finding support for company recommendations against the resolutions in all instances.
  • Investors were asked to approve an increase in the maximum aggregate level of fees that could be paid to companies’ non-executive directors at 3 meetings during the period.  CSC supported all 3 proposals.  

3.  Director Election

CSC considered 138 proposals for director elections, rejecting only 1 proposed appointment.

4.   Constitutional matters

CSC supported proposals for all 30 constitutional amendments sought by companies. 

5.  Proxy Voting at meetings of international companies

Upon the introduction of a new agreement with CGI Glass Lewis (CGL) in 2013 CGL has  provided a research and voting service for all unimpeded  International Equities holdings in accordance with CGL voting policies in each country on CSC’s behalf.  CSC does not vote in markets that require share blocking, account re-registration or any other additional steps or impediments to voting. 

  • From July 2013 CGI Glass Lewis has researched and voted upon CSC’s International Equities holdings in accordance with CGL’s voting policies. Since January 2014 CGL has voted at 2358 meetings on 27,791resolutions in 50 Countries over 7 regions (excluding Australia). 
CSC's International voting January to June 2014 
Issue CategoriesNo of resolutionsResolutions not supported
No.%
Director election 12772 1914 15%
Execution remuneration 250 48 19%
Non-executive remuneration 647 137 21%
Issue of new shares 89 9

10%

Remuneration Report 1117 248 22%
Financial scheme/ reconstruciton of capital 35 10 29%
Constitution/ articles of association change 901 231 26%
Appoint/ Reappoint Auditor 1388 157 11%
Takeover or merger acquisition 88 7 8%
SHP 444 294 66%
SHP - Environment 81 79 98%
SHP - Social 112 81 72%
All Other Proposals 9867 1950 20% 
Total 27791 5165 19% 

Ballots by Region and Vote Status

 Ballots by Region and Vote Status