ASIC has released Information Sheet 144 Annual general meetings: Voting on the remuneration report resolution on the new provisions on remuneration report resolutions for listed companies and the circumstances in which ASIC may provide relief to chairpersons at annual general meetings (AGM) in respect of undirected proxies on remuneration report resolutions.

Under the new rules introduced by the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011, section 250R(4) prohibits the chairperson from voting undirected proxies on the remuneration report resolutions. However the government has clearly indicated its intention that the chairperson should be able to vote undirected proxies in certain circumstances, including on remuneration report resolutions.

During 2011, the government proposes to amend the provisions to make it clear that chairpersons are permitted to vote undirected proxies on remuneration report resolutions. Until the rules are amended to give effect to the government’s intention, ASIC’s information sheet provides options for companies to consider when complying with the current rules. UPDATE: see Media Release from Parliamentary Secretary to Treasurer

These options include:

• making no change to the company’s usual proxy form and ensuring that the chairperson will not vote any undirected proxies on the remuneration report resolution;
• changing the company’s proxy form so there are more directed proxies, which can be counted in the vote on the remuneration report;
• suggesting shareholders consider nominating a proxy other than a member of the company’s key management personnel for the purposes of the remuneration report resolution; and,
• applying to ASIC for relief in relation to a specific resolution.

Companies that wish to apply for relief must make an application to ASIC and include information as set out in the information sheet. Companies seeking relief will need to do so before dispatching documents to shareholders. Under the law, ASIC can only grant relief if it is satisfied that relief will not cause unfair prejudice to the interests of any member of the company.