Recent changes to the Corporations Act 2001 will impact voting on remuneration report resolutions at AGM’s

Changes introduced to the Corporations Act 2001 now restrict members of a company’s key management personnel, their proxies and closely related parties from voting on remuneration report resolutions placed before shareholders for consideration at annual general meetings where the report includes details of the remuneration of the key management personnel. Key management personnel will include the chairman, other directors and generally senior management.

These new restrictions will not apply, however, where key management personnel are appointed in writing (by a shareholder who is not a member of the key management personnel of the company) as a proxy with specific instructions on the way in which the vote is to be cast on a resolution to adopt the remuneration report.

These changes will impact companies during this AGM season and a failure of key management personnel to comply with these voting restrictions is characterised as an offence and subject to the general penalty provisions of the Corporations Act.

Our next altert will deal with identified anamolies in the new legislation which could have potentially serious consequences for a chairman at a company’s AGM if undetected.

Please contact the Legal Director & Governance Specialist, Robert Nicholls, at Prestige Legal & Corporate Services should you require any further information on the issues detailed in this alert.

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