Important highlights from upcoming meetings, provided by Glass Lewis’ global research team
Ardent Leisure Group Limited Australian Securities Exchange – November 13
It has been three years after the fatal accident on one of the rides at the Dreamworld theme park in Queensland, Australia, and Ardent Leisure is still bearing the consequences of that tragedy. The accident had a notable impact on company’s reputation and financial performance, prompting significant refreshment of the executive team and the board.
With veteran Australian investor Dr. Gary Weiss leading the company’s board from September 2017, Ardent has undergone major transformation, including transitioning from the stapled security structure in December 2018. This was aimed to simplify ALG’s structure and make it more attractive for the US investors. Currently, the company operates through two, very distinct business units: US-based Main Event and Australian Theme Parks with more than 85% of the revenue coming from the US. Separation of the two businesses is also apparent from the refreshed executive team with Chris Morris appointed as the CEO of the US branch and John Osborne as CEO of the Australian operations.
This unique structure has prompted the board to move away from the off-the-shelf long-term incentive plan and introduce something seemingly more fit-for-purpose in terms of the current strategy. The new one-off, cash-settled award aims to incentivise the executives for building up the enterprise value of the two separate business units in the anticipation of a realisation event. Given the rather vague disclosure of the new plan, shareholders can feel left in the dark when it comes to some of its crucial features. Hence, at the upcoming AGM, it may all come down to the trust that shareholders have in the board’s intentions.
Kogan.com Limited Australian Securities Exchange – November 19
This is the fourth AGM since Kogan.com went public, but the composition of the online retailer’s board suggests it is still adjusting to best practice. While the appointment of Michael Hirschowitz bolsters the level of independent representation, the board is still comprised solely of men, with no women directors having served since the company’s listing. Moreover the company’s CFO, a 8% beneficial owner, serves on the audit committee, and the founder, CEO and namesake, Ruslan Kogan, serves on the remuneration committee. That has yet to result in any particularly problematic payouts, but raises questions about oversight—especially given that awards under the company’s incentive structure appear to be fairly ad hoc. As chairman of the board, and of the remuneration and nominating committees, Greg Ridder may face scrutiny from investors on these topics—and investors will have to consider whether a vote against Ridder, who is standing for re-election, is warranted.Virtus Health Limited Australian Securities Exchange– November 20
On October 29, 2019, Virtus Health Limited announced that the MD/CEO Sue Channon will step down from her role in February 2020. This announcement came after the release of the company’s 2019 AGM Notice of Meeting and Annual Report, and the timing raises an unusual scenario for shareholders to consider. While the MD/CEO will remain in her position for only eight months of FY2020, the company is nonetheless proposing to grant her a full FY2020 LTI equity award. Even though long-term equity awards are intended to encourage retention, it’s not unheard of for them to be granted to an outgoing executive—but when they are, shareholders generally expect them to be pro-rated to reflect their departure. That didn’t happen here, raising questions about remuneration oversight. Channon isn’t the company’s only significant departure: chair Peter Macourt will leave at the AGM, replaced by incumbent NED Sonia Petering. Shareholders will note that the board changes have left certain committees understaffed, with only two directors; we expect these vacancies to be addressed in due course.