intelligence report report...2013 % of issued capital voted (all meetings) nzx other overall 54.3...
TRANSCRIPT
IntellIgenceRepoRtInsights from company meetings held in 2015
New Zealand
April 2016
Contents
> Computershare — Intelligence Report
Executive summary 1
Company meetings held in New Zealand 2
Investors 3
CGI Glass Lewis 4
Securityholder communications 5
Voting 6
Voting channels 7
Plan participant voting trends 8
Meeting attendance 9
Best practice advice for your annual meeting 11
New Zealand annual meeting venues 12
Executive summary
1 > Computershare — Intelligence Report
Stuart Jury Managing Director [email protected] 09 488 8742
Welcome to Computershare’s 2015 report of company meetings held in New Zealand, outlining insights into the trends, issues and innovations from the most recent company meeting season to help you better understand the behaviour of your securityholders and engage in best practice for voting and meeting processes.
Computershare was involved in 95 meetings in 2015 with 46% of these held between September and November. The majority of meetings we managed were annual meetings, but we also assisted with a number of special and other meetings.
In 2015, almost 70% of Computershare’s New Zealand clients used our online platform InvestorVote, compared to 61% in 2014. About 1.7% of securityholders attended company meetings in New Zealand, up 0.4% from 2014, and 5% of securityholders lodged a proxy or voted at company meetings, compared to 4.1% in 2014. The average amount of overall issued capital voted across all Computershare New Zealand companies was 50.7%, compared to 54.9% in 2014.
When comparing these results with Australian results, there are two notable differences which relate to meeting attendance and the number of securityholders voting online.
Meeting attendance in Australia has dropped 25% over the last 10 years and now down to 0.158%, compared to 1.7% in New Zealand. 46.5% of New Zealand securityholders are voting online compared to 32.5% of Australian securityholders.
InvestIng In future development and InnovatIon to reduce your meetIng costsMeeting and voting trends have stabilised over the last few years and only 5% of securityholders are voting. However, running a meeting continues to be a costly exercise, in terms of both monetary and management effort for issuers. To help our clients better balance the desire for cost savings with the changing preferences of investors, Computershare continues to invest in technologies that reduce the cost of the annual meeting per securityholder.
We’re in discussions with the Department of Treasury and the Governance Institute of Australia on the introduction of an ‘opt in’ regime for the distribution of meeting materials. Currently it’s mandatory to send a proxy and Notice of Meeting to all securityholders – with a less than 5% return rate for physical proxies, this is a significant cost for our clients.
We’re also drawing on insights from our colleagues in other regions and leveraging technology to create new ways for our clients to present key investor information, host meetings online and process votes in real time. We’ll help reduce your meeting costs without disengaging securityholders by:
> Delivering a new investor relations app that allows securityholders attending a meeting in 2016 to vote using their own device
> Supporting virtual and hybrid annual meetings by enabling securityholders to view live webcasts of the event and vote remotely via the investor relations app
> Continuing to help clients increase the proportion of their securityholders with e-communication preferences recorded against their holding
> Creating and hosting online investor relations document packs on your behalf, including interactive Annual Reports via our joint venture partner, The Reach Agency
In this report we also bring you commentary from CGI Glass Lewis on their voting policy in New Zealand, share plan voting trends and a link to our Australian 2015 Intelligence Report.
I welcome your feedback, so please feel free to contact your relationship manager, or Caroline, Chris or myself with any comments or questions.
Regards,
Stuart JuryChris Woodhouse Business Development Manager [email protected] 09 484 8511
Caroline Hellaby Senior operations Manager [email protected] 09 488 8752
2
2
2 > Computershare — Intelligence Report
Company meetings held in New Zealand
2
2
2
5%
50.7%1.7%
68%
46.5%
Computershare was involved in
95 meetings in 2015
up
6.9%
down
4.2%of securityholders voted
of companies use InvestorVote
of securityholders attended company
meetings
of securityholders who voted did so online
up
7%
up
0.9%
up
0.4%
of issued capital was voted
Downward trendthe past year has shown a decline in the amount of voted issued capital, decreasing to just over 50%. this is down over 4% on the previous year. over the same period, the total number of securityholders voting has increased, which would suggest that larger holders have chosen not to vote.
Votes on the floorthere has been a drop in issued capital voted at meetings compared to 2014 and combined with the decline in issued capital voted prior to the meeting, shows an increased apathy towards voting.
03 > computershare
Issued capItal voted
0%
10%
20%
30%
40%
50%
60%
70%
2015
2014
2013
% of Issued capital voted (all meetings)
NZX Other Overall
54.3
56.2
52.9
54.2
54.1
54.9
54.4
48.8
50.7
Trends continue to show a higher level of issued capital voted for NZX50 companies compared to others. However there has been a decline in total issued capital voted across the board when compared to 2014. The decline is more significant for companies outside the NZX50, with a drop of 5.4%.
Companies outside NZX50 vote more capital in person at meetings
Votes on the floor
The decline in voting is more noticeable for NZX50 companies with a drop of 2.7%, though all companies have shown a decline.
The highest percentage of floor votes are attributed to companies outside of the NZX50 with more votes submitted by major stakeholders attending meetings and voting in person.
Investors
0%
3%
6%
9%
12%
15%
2015
2014
OverallOtherNZX 50
Votes on the floor as % of ALL issued capital by index
9.4
5
4.89
12.4 8.1
2.4
11.5
3 > Computershare — Intelligence Report
NZX 50
Daniel J SmithGeneral Manager CGI Glass Lewis [email protected]
Daniel J Smith is general manager of cgI glass lewis. Dan has nearly a decade of experience in corporate governance across several major markets. He joined cgI glass lewis in 2014 after holding a number of research, client services and operations positions at Institutional Shareholder Services in Australia, the United States and the United Kingdom. Dan has published numerous studies and is a regular speaker on governance issues. He is a graduate of the University of california, Santa cruz, and has a master’s degree from the edmund A. Walsh School of Foreign Service at georgetown University where he studied international business diplomacy.
cgI glass lewis is a subsidiary of glass, lewis & co., an independent governance analysis and proxy voting firm with a global client base of over 1,200 clients that collectively manage more than US$25 trillion in assets. glass lewis empowers institutional investors to make sound voting decisions at more than 22,000 meetings a year at issuers domiciled in 100 countries.
04 > computershare
cgI glass leWIs votIng polIcy for neW zealandCGI Glass Lewis is of the view that companies should incorporate policies for board diversity and related disclosures in their annual reports or in any other prominent public disclosure. If a particular company has not yet formalised its diversity policy, or elements thereof, we expect a company to provide a cogent explanation on an ‘if not, why not’ basis.
If a board has a poor record on the issue of board diversity and has not implemented these reporting provisions or has not addressed other major issues of board composition, including the composition and mix of skills and experience of the independent element of the board, we will consider recommending voting against the chair of the nomination committee, or the equivalent.
Non-executive directors (NEDs) who serve on more than six major boards will usually receive ‘against’ voting recommendations. Depending on the NED’s workload, including on other boards, and capacity, we may recommend voting against a NED who serves on more than five major boards. For this purpose, we believe service as non-executive chairman of a board is equivalent to two ordinary non-executive directorships, given the amount of time needed to fulfil the duties of chairman.
NEDs, who serve as an executive of any public company while serving on more than one other public company, or large unlisted company, will also usually receive ‘against’ voting recommendations unless the director is in a publicly disclosed transition from an executive to a non-executive career.
cgI glass leWIs tenure polIcy for neW zealandCGI Glass Lewis applies the principle that, we will review the classification of the non-executive director (NED) after 15 years of service, and unless we are satisfied from our review that the NED remains demonstrably independent, we will cease to classify the NED as independent.
CGI Glass LewisDaniel J Smith
4 > Computershare — Intelligence Report
CommunicationWe sent more than 259,000 emails and 430,000 mailpacks to securityholders in relation to their meetings.
Our mailing house (NZAX:SDL)In partnership with Solution Dynamics limited (SDl) we can provide expertise to support your securityholder strategy – from best practice design of your reports (printed and online) through to a range of online self-service options to help control costs and improve engagement.
5 > Computershare — Intelligence Report
communIcatIng your meetIng documentatIonCompany meeting materials are complex documents designed to provide securityholders with everything they need to know about an upcoming meeting.
It’s a challenge for companies to create engaging pre-meeting materials for their securityholders, especially with the drop in demand for printed materials reflecting the shift to online communications.
Securityholder communications
0%
20%
40%
60%
80%
100%
2015
2014
2013
2012
EmailPaper
Securityholder communications (paper vs email)
97.4 65.9
4.89
34.1
76.8
23.2 37.6
62.4
2.6
2015 Annual Report
Participationthe number of securityholders lodging a proxy or postal vote prior to the meeting has dropped slightly by 0.2% in 2015, but has remained fairly static for the past three years.
An electronic approach to meetingsKeypad voting offers instant and accurate results for polls, with voting linked to securityholding size. the handsets can also be used as microphones to facilitate a Q&A session, with the queue of names appearing on the chairman’s monitor. globally this method of voting was used by over 200 companies, and was successfully used by Fletcher Building during their 2015 annual meeting.
Virtual meeting technology is also available to companies wishing to offer a hybrid meeting approach, with our InvestorVote technology integrated into the webcast system providing securityholders with all information within one site. annual meeting webcasts have increased with 70% of the nZX top 10 and 65% of the ASX100 webcasting their annual meeting.
06 > computershare
securItyholder votIngVoting participation has remained fairly static with only a small decline in 2015. Companies outside of the NZX50 see the highest participation with 1.3% more securityholders submitting their vote prior to the meeting; these companies also saw an increase in voting compared to the NZX50 companies which experienced a drop in voting.
Number of securityholders voting drops slightly
0%
2%
4%
6%
8%
10%
2015201420132012
% of securityholders who lodged a proxy/postal vote before the meeting
6.7
5.2 55.2
Companies outside the NZX50 seeing more securityholders vote
0%
2%
4%
6%
8%
2015
2014
2013
2012
% of securityholders who voted before the meeting
NZX 50 Other Overall
5.8
5.6
4.8
5.1
6.8
5.4
6.7
5.2
5.2
4.1
5.4
5
Voting
6 > Computershare — Intelligence Report
Voting via emailthe use of personalised URls (pURls) has provided securityholders with a quick and easy link to submit their proxy or postal vote online. As email communications have increased over the past few years this has had a positive impact with an increase in securityholders submitting their votes online.
Mobile online votingof those securityholders who lodged their proxy or postal vote online, 11.8% did so via a mobile device, up from 10.9% the previous year. We expect to see this increase over time given the rise in the use of smartphones and tablets.
7 > Computershare — Intelligence Report
onlIne votIng2015 saw the enhancement of InvestorVote to enable a more intuitive way for a securityholder to submit a postal vote; this was successfully used by several clients after the launch in August.
We continue to see an increase in online voting with 46.4% of securityholders now submitting their votes through InvestorVote. If this trend continues, 2016 could see over 50% of votes submitted online.
Online voting continues to grow
0%
10%
20%
30%
40%
50%
2015201420132012
% of securityholders who voted online
23.7
34.3
42.9
*All meeting types excluding meetings where InvestorVote not used
46.4
InvestorVote Mobile
Mobile voting starting to increase
Voting channels
0 20 40 60 80 100
2015
2014
2013 10.4
11.8
89.6
88.2
InvestorVote Mobile vs. Desktop
Mobile Desktop
10.9 89.1
James Marshall Managing Director computershare plan Managers
Plan participantsMany companies’ primary objective for their plans is to increase employee engagement, with retention and productivity the key measures. Statistics from a recent survey conducted on behalf of computershare by the london School of economics and Harvard (download here) show plan participants are, on average, more productive and loyal to their employer.
8 > Computershare — Intelligence Report
employee plan admInIstratIonOne significant advantage for companies that use Computershare for their employee equity plans administration is the use of InvestorVote to capture their employees’ voting intentions. This ensures communications and voting channels are consistent across both employee and securityholder registers.
Employee plan participants vote increased slightly in 2015 .
eholders who voted comparison - plan participants vs all rs
0%
2%
4%
6%
201520142013
5. .3
1.92.1
4.6
3.2
CPM ALL
% of issued capital voted comparison - plan participants vs all shareholders
0%
10%
20%
30%
40%
50%
201520142013
46.1 45.4
3.7 3.2
48
7.1
CPM ALL
4.6% of securityholders voted across all company meetings compared to 3.2% of employee plan participants, which was a 52.4% increase on last year’s participant vote, bucking the trend we’re seeing with ordinary securityholders.
Research conducted by Computershare shows that one in three employee plan participants check their company share price daily, indicating a high level of interest in its performance, so we would expect to see a higher percentage of participants voting. More targeted plan communications to employees can lead to further increases in participation.
7.1% of issued capital held in employee plans trusts received voting instructions from plan participants, up 121.9% on 2014 figures. On face value the comparison between the votes received by trustees and the total vote as far as issued capital is concerned seems stark, but as indicated elsewhere in this report, a significant proportion of the vote comes from institutions.
For more insight into employee share plans, read our latest Intelligence Report on plan trends here.
Plan participant voting trends
5
ecurityholders
% of securityholders securityholders
4
AttendeesWe registered approximately 4,000 attendees (securityholders and visitors) for company meetings in 2015.
9 > Computershare — Intelligence Report
meetIng attendees
Meeting attendance shows an increase
0.0%
0.5%
1.0%
1.5%
2.0%
2015201420132012
% of securityholders in attendance (all meetings)
1.7
1.5
1.3
1.7
Meeting attendance has been trending downward over the last three years. However results for 2015 saw an increase in meeting attendance. In comparison, attendance in Australia is significantly lower with only 0.1% of securityholders attending meetings.
We have noticed appointed proxies not attending the meeting, where votes can be lost if a second appointee is not provided. We can discuss this in more detail for your meeting.
Increase in meeting attendance for companies outside NZX50
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
2015
2014
2013
2012
OverallOtherNZX 50
% of securityholders in attendance
0.9
0.7
4.89
0.8
0.7
2.3 1.71.9 2.3
1.7 1.31.5 1.7
Meeting attendance
10 > Computershare — Intelligence Report
Companies who polled in 2015In 2015 we saw a decrease in the number of companies opting to poll, reversing the trend on previous years. NZX50 companies are most likely to poll, with 55% of meetings electing to take the resolution votes in this manner. The number of companies outside of the NZX50 electing to poll has dropped significantly compared to 2014.
0 20 40 60 80 100
2015
2014
2013
2012 39.3
42.9
60.7
57.1
Show of Hands vs Poll - NZX 50
Show of Hands Poll
41.4 58.6
45 55
0 20 40 60 80 100
2015
2014
2013
2012 57.1
54.8
42.9
45.2
Show of Hands vs Poll - Other
Show of Hands Poll
52.4 47.6
71.9 28.1
Meeting attendance continued
before the meetIngBegin your planning early to ensure you’re prepared. You could start by considering the following:
> Who are the decision makers behind your top securityholders and how will they vote this year?
> Do you regularly monitor the press, industry commentators and social media before, during and after your annual meeting? How will you monitor and manage these channels as part of your communication strategy this year?
> Have you engaged with securityholder activists? Have someone from your company available to speak with activists and allow them to voice their concerns prior to the meeting in order to reduce their access to an audience
> Securityholders are demonstrating a clear preference for digital communications – what can you do to meet these needs? Consider offering your securityholders online and mobile device voting which is also particularly helpful for overseas-based securityholders
> Don’t wait until the time of the annual meeting to ensure your list of Key Management Personnel (KMPs) and Closely Related Parties (CRP) is up to date and provided to Computershare or their delegate
> When designing your proxy form, engage your Computershare relationship manager to ensure best practice standards are adopted
> If you’re planning to hold your annual meeting on a Monday or Tuesday, proxies will close off on a weekend which makes it difficult to contact relevant parties and resolve any instances of over-voting. Ensure your proxy close-off date allows sufficient time for any over- vote positions to be rectified
> Have you made sure that management, including board members and trustees for employee plan shares have voted their positions prior to the meeting? Every vote is important, but missing the votes for these larger positions is a highly visible error and can potentially affect the outcome of a vote
on the dayAdd these items to your annual meeting checklist so they are available at the meeting:
> Meeting materials — it’s good practice to have a supply of Annual Reports, Notice of Meeting and any other relevant meeting materials on hand
> Constitution
> Previous meeting minutes
> Chairman’s script/agenda for the day
> Organise a laptop with an internet connection so you can upload NZX announcements at the meeting
11 > Computershare — Intelligence Report
Best practice advice for your annual meeting
12 > Computershare — Intelligence Report
New Zealand annual meeting venues
aucklandAlexandra Park Corner Greenlane West & Manukau Road Greenlane 1051 (09) 630 5660 www.alexandrapark.co.nz [email protected]
ANZ Viaduct Events Centre 161 Halsey Street Central Auckland 1010 (09) 363 6070 www.aucklandconventions.co.nz
Aotea Centre 50 Mayoral Drive Central Auckland 1010 (09) 309 2677 www.aucklandconventions.co.nz
Eden Park 42 Reimers Avenue Kingsland 1024 (09) 815 5551 www.edenpark.co.nz [email protected]
Ellerslie Event Centre 80 Ascot Avenue Remuera 1050 (09) 524 4069 www.eventcentre.ellerslie.co.nz
The Langham Auckland 83 Symonds Street Central Auckland 1001 (09) 379 5132 www.langhamhotels.com [email protected]
Mercure Auckland 8 Customs Street East Central Auckland 1010 (09) 377 8920 www.accorhotels.com [email protected]
Pullman Auckland Corner Princes Street and Waterloo Quadrant Central Auckland 1010 (09) 353 1000 www.pullmanauckland.co.nz [email protected]
Rydges Auckland 59 Federal Street Central Auckland 1010 (09) 375 5900 www.rydges.co.nzOnline enquiry form
SKYCITY Convention Centre 88 Federal Street Central Auckland 1010 (09) 363 6070 www.skycityauckland.co.nz [email protected]
Stamford Plaza Auckland 22-26 Albert Street Central Auckland 1010 (09) 309 8888 www.stamford.com.au
Waipuna Conference Suites Highbrook 60 Highbrook Drive East Tamaki (09) 571 4888 www.waipunahotel.co.nz [email protected]
Waipuna Hotel & Conference Centre 58 Waipuna Road Mount Wellington 1062 (09) 526 3000 www.waipunahotel.co.nz
chrIstchurchThe Chateau on the Park 189 Deans Ave Riccarton 8011 0800 808 999 www.chateau-park.co.nz [email protected]
Pepper’s Clearwater Resort Clearwater Avenue Northwood 8051 0800 448 891 www.peppers.co.nz
Commodore Hotel 449 Memorial Avenue Burnside 8053 0508 266 663 www.commodorehotel.co.nz [email protected]
Riccarton Park 165 Racecourse Road Sockburn 8042 (03) 336 0055 www.events.riccartonpark.co.nz [email protected]
WellIngtonInterContinental Wellington 2 Grey Street Central Wellington 6011 (04) 472 2722 www.intercontinental.com [email protected]
James Cook Hotel Grand Chancellor 147 The Terrace Central Wellington 6011 (04) 499 9503 www.grandchancellorhotels.com [email protected]
Mac’s Function Centre 4 Taranaki Street Central Wellington 6011 (04) 381 2282 www.macsfunctioncentre.co.nz [email protected]
Museum of New Zealand Te Papa Tongarewa 55 Cable Street Central Wellington 6011 (04) 381 7272 www.tepapa.govt.nz [email protected]
AbOuT COMPuTERSHARE LIMITED (CPu)
Computershare (ASX:CPU) is a global market leader in transfer agency and share registration, employee equity plans, proxy solicitation and stakeholder communications. We also specialise in corporate trust, mortgage, bankruptcy, class action and utility administration, and a range of other diversified financial and governance services.
Founded in 1978, Computershare is renowned for its expertise in high integrity data management, high volume transaction processing and reconciliations, payments and stakeholder engagement. Many of the world’s leading organisations use us to streamline and maximise the value of relationships with their investors, employees, creditors and customers.
Computershare is represented in all major financial markets and has over 15,000 employees worldwide.
For more information, visit www.computershare.com
COMPuTERSHARE INVESTOR SERVICES LIMITED
Level 2, 159 Hurstmere Road, Takapuna, Auckland 0622
(09) 488 8700
www.computershare.com/nz
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