Important highlights from upcoming meetings, provided by Glass Lewis’ global research team:

Harvey Norman Holdings Limited  Australian Securities Exchange  November 27

Concerns about the composition and independence of the board at Harvey Norman have lasted longer than some of the appliances and electronic gadgets sold by the retailer: up until March of this year, the most junior director joined prior to the GFC. With the appointment of Maurice Craven, the company now has a board member whose independence isn’t complicated by business relationships, familial ties, or long-service–but that appointment appears to have come too late to stop one shareholder from taking matters into his own hands. In addition to the four board-nominated candidates, Stephen Mayne, a journalist, entrepreneur, shareholder advocate and former local government councilor”, has put himself forward for election at the 2019 AGM.

Mayne says he’s pushing for governance reforms and a new approach to the company’s portfolio, more in line with that of property trusts. In particular, Mayne takes issue with the structure of the company’s capital raisings, and claims to have “offered to withdraw his 2019 nomination for the Harvey Norman board if the directors agreed to compensate non-participating retail shareholders in the recent $173 million capital raising by auctioning off the shortfall to the highest bidder in an institutional bookbuild.”

The vote results of recent AGMs suggest that Harvey Norman’s shareholders are ready for a change. Whether the outsider Mayne garners much support from institutional investors remains to be seen, but given the current board controls the company, some shareholders may see this as an opportunity to lodge a more novel protest vote without running the risk of actually electing the outsider to the board.  Such a novel protest vote is too novel for us here at CGI Glass Lewis as we don’t believe it will be constructive for the insider-outside shareholder relationship, however media reports indicate other advisors around town might not feel the same way.

Aurelia Metals Limited Australian Securities Exchange November 29

Departures can be difficult. When James Simpson stepped down as Aurelia‘s MD/CEO earlier this year, the board found a way of smoothing things over: in addition to a contractual termination payment, it exercised its discretion to pay Mr. Simpson’s 2019 STI and LTI in full, and waive all performance conditions on three tranches of unvested awards. While those decisions may have made saying goodbye a little easier at the time, they are likely to raise questions from shareholders who are ultimately footing the bill.

Whereas “below target STIP payments were justified to senior executives”, Mr. Simpson’s award was paid in full, with no pro-rating for time served. By contrast the CFO, who served the full year, received only 75% of his STI opportunity. Similarly, whereas only 75% of the CFO’s eligible long-term incentive vested, the board decided to vest 100% of Mr. Simpson’s 1,500,000 performance rights. In addition, the board exercised its discretion to waive the performance conditions on a further 4,041,964 performance rights that remained outstanding on Mr. Simpson’s departure; those awards were allowed to vest and were converted into shares with no pro-rating applied.

Of course, hellos can be awkward as well. Perhaps unsurprisingly, Aurelia’s board took a similar approach, offering newly appointed MD/CEO Dan Clifford rights over 3,130,402 shares, or roughly A$1.38 million, subject to continuous employment. Shareholders will get the opportunity to vote on that grant, as well as the remuneration report covering Mr. Simpson’s departure, at the upcoming AGM.