Biotech Daily Editorial: Shareholder Voting, Again
December 12th 2010 05:11
Monday November 29, 2010
Daily news on ASX-listed biotechnology companies
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BIOTECH DAILY
Every November, Biotech Daily tries to report fairly on the results of annual general meetings and in doing so runs into the problem of non-transparent voting.
Companies must report proxy votes received as well as the “show of hands” in the room, but the numbers of shares attached to those hands is discretionary.
Companies do not have to report the number of votes in the room, nor declare in their results the number of shares on issue.
This creates a problem for accurate reporting and in an attempt to be fair to the Prima and Agenix meetings last week (BD: Nov 26, 2010), Biotech Daily said it reported “all company meetings where the active vote against a resolution exceeds five percent, the level required to call general meetings.”
What should have been made more clear is that five percent of the total share register is required to call a meeting, but in the absence of an accurate count of meeting votes, we report anything above five percent of those who bother to vote, not including abstentions or votes at the discretion of the chair.
In the case of Prima, the increase in non-executive directors’ remuneration along with options to directors were opposed by more than 7.4 million proxy votes (11.7%) to more than 53.4 million proxy votes (88.3%) in favor.
But in its most recent Appendix 3B statement Prima said it had 743,811,830 shares on issue, reducing the opposition to about one percent of the total shares on issue.
The Agenix resolution on a director and executive equity plan was approved by 4,953,806 proxy votes in favor (62.1%) compared to 3,021,337 proxy votes (37.9%) against, but at its last Appendix 3B Agenix had 718,553,021 shares on issue reducing the opposition to less than half of one percent.
Meanwhile, we are not told how many shares are held in the “show of hands in the room” which for both companies could easily be tens of millions of votes in favor and with no dissent.
But we do not know.
One reason for not publishing the total number is the cost of correctly auditing the votes in the room, said to be several thousand dollars.
So shareholders and reporters can only guess at what might have happened in the meeting room, because the Corporations Act, the Australian Securities and Investments Commission (ASIC) and the ASX do not require transparent reporting of meeting resolutions. All that is required is that proxy votes be counted.
Where there is a significant number of proxy votes opposing a resolution – and it is most frequent with directors awarding themselves increases in remuneration or stock – Biotech Daily will continue to report the number of ‘active’ votes.
Until we move to a completely transparent, electronic voting system there is no other way to let investors know the sentiment within the company.
David Langsam
Editor
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