Research & News
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24 / 052021
Proxy investor advice overhaul all about the politics
Published in the Financial Review on May 23, 2021 This article can be downloaded by clicking on the following link: OM_AFR_Proxy Advisor Opinion_DP_24 May 2021
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20 / 052021
Submission to Treasury on Proxy Advice Reforms
This submission can be downloaded by clicking on the following link: Submission to Treasury_FINAL_May 2021
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25 / 102020
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01 / 042020
Open season for IBs and takeovers by stealth: Emergency capital raising relief
ASX and ASIC have announced “Temporary emergency capital raising relief”. The relief, which expires at the end of July 2020, provides for placement capacity of 25% where a raising is conducted alongside an entitlement offer or SPP. The relief, if used, will result in significant dilution for some – particularly retail shareholders and institutional shareholders not invited to participate – or where the entitlement offer is small. Control implications of capital raisings are also exacerbated – a 19.99% placement combined with sub-underwriting could result in a single holder having a position beyond 30%. A “supersized waiver” can also be used which would increase the placement capacity to 50% where a one-for-one entitlement offer is undertaken. The liberal nature of the relief places the onus on boards to ensure raisings are conducted fairly – and not merely in a way suiting investment banks and their favoured clients. The report can be downloaded by clicking on the following link: Capital raisings Emergency relief
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26 / 032020
Declared dividend trends and updates
In turbulent markets, some companies are cancelling or suspending dividend payments to protect balance sheets Across the S&P/ASX 300 dividends announced but not paid as at March 25th totalled ~$17.6bn, and the ability to cancel such payments may be a key source of funding for many companies To date dividends worth $404mn have been cancelled, $384mn deferred and $16.7bn remain ‘payable’ Under s.254T of the Corporations Act, a solvency test is outlined when considering a company’s dividend payment. Interim dividends can typically be cancelled. Some companies that are raising capital have yet to announce dividend cancellations or suspensions, including OML, SXL and WEB (ex-date 25th March). A data table with the status of ASX 300 company dividends announced, but yet to be paid can be provided The report can be downloaded by clicking on the following link: LESSONS FROM GFC CAPITAL RAISINGS – IMPLICATIONS IN THE CURRENT ENVIRONMENT
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24 / 032020
Lessons from GFC capital raisings: implications in the current environment
Capital raisings that took place during the GFC contain many lessons in the current environment. • GFC capital raisings revealed a preference for placements rather than entitlement offers • Some placements were made on expanded (post raising) capital bases where undertaken alongside entitlement offers and led to dilution of up to 30% • Issue price discounts were largest when raising capital to pay down debt • Fees paid to underwriters didn’t always appear to reflect genuine underwriting risk • Beware sub-underwriting by strategic shareholders that has control implications Preferred structure for capital raisings is accelerated renounceable entitlement offers, timetable was significantly shortened by ASX in 2014 and should be the starting point for non-distressed raisings. The report can be downloaded by clicking on the following link: Further reading on the GFC capital raisings is available here and post GFC capital raisings is available here.
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07 / 032018
Key Audit Matters
For financial periods ending after 15 December 2016 the auditor has a responsibility to communicate key audit matters (KAM) in the audit report. This disclosure for listed companies has now been a requirement for a year, so all companies have at least one set of accounts with KAMs specified. OM analysed 290 KAM disclosures for ASX 300 companies during 2017 to observe trends and identify any companies where the audit matter may provide insight for investors. KAMs can provide users of financial statements with hints as to areas of disclosure that may warrant further investigation or seem otherwise innocuously disclosed. Examples include: 1. Austal (ASB) 2. Graincorp (GNC) 3. Steadfast (SDF) 4. Sky Network Television (SKT) 5. Blue Sky Alternatives (BLA) 6. Domino’s Pizza (DMP) 7. Fairfax (FXJ) / Nine Entertainment (NEC) 8. Myer Limited (MYR) The report can be downloaded by clicking on the following link: OM Key Audit Matters Matter
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24 / 022016
Review of 2015 general meeting outcomes
OM’s annual review of meeting outcomes across the S&P/ASX 300 reviews increased signs of investor willingness to oppose board-endorsed directors with incumbent directors at three companies resigning immediately prior to the annual meeting presumably in the face of significant investor opposition. The number of ‘strikes’ on remuneration report resolutions also increased slightly, from 16 across the S&P/ASX 300 in 2014 to 19 in 2015. The ongoing phenomenon of management narrowly avoiding defeat also continued. OMBriefingPaper 2015 OVERVIEW 160224 FINAL
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22 / 022016
Back to the dark ages with $2.5bn placement
ASX Corp Governance: ANZ lags NAB with a dinosaur $2.5bn insto placement rather than rights issue (NAB was $5.5bn rights). Placement/SPP aims to “quickly” raise capital, which is actually required by APRA before July 2016. Click here for the full article
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22 / 022016
Why should executives get half their performance linked pay, merely for median performance?
June 2015 results are mostly complete and AGM season is around the corner. This means increased focus on executive remuneration, as these days the “rem report” is a key resolution at each ASX listed AGM. Click here for the full article
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18 / 122015
ASX submission: Review of approvals required for reverse takeovers
Read OM’s submission to the ASX’s call for consultation on whether it should introduce a rule making ‘reverse takeovers’ – where the ‘bidder’ shareholders end up with less than half the merged company – conditional on bidder shareholder approval. ASX is rare among global peer exchanges such as the LSE, HKEx, SGX and NYSE in not requiring any bidder shareholder approval in this situation. The submission can be downloaded by clicking on the following link: OM Submission to ASX 7.1A Review
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04 / 122015
Submission to ASX Listing Rule Review
Read OM’s submission to the ASX’s review of Listing Rule 7.1A which allows smaller companies to conduct larger dilutive capital raisings than those in the S&P/ASX 300. OM has recommended ASX provide the market the same detail on participants in raisings under Rule 7.1A as it receives. To download a copy, please click on the following link:
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11 / 022015
2014 voting results summary: S&P/ASX 300
This report summarises key themes from the results of all resolutions at securityholder meetings of S&P/ASX 300 entities in 2014.
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25 / 082014
A taxing time: a review of tax disputes in the ASX 200 – 2013/4
This comprehensive report reviews all disclosed tax disputes on foot with ASX 200 companies, highlighting the $711 million in earnings at risk.
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15 / 122013
The cost of remuneration advice in the S&P/ASX 200
In a report prepared by Ownership Matters, the pay data for remuneration consultants is compiled and analysed, along with the regulatory regime that governs the disclosure of remuneration advice.
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15 / 112013
Submissions on proposed governance changes to the ASX listing rules
In August 2013, the ASX released a consultation paper seeking comments on a number of proposed governance-related amendments to its Listing Rules and proposed changes to Guidance Note 9 Disclosure of Corporate Governance Practices. Ownership Matters prepared detailed submissions in response.
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18 / 102013
Capital raisings 2013 – too much is never enough
Ownership Matters compiled and analysed capital raising data for every company in the S&P/ASX 300 in the post-GFC period (2010 to 2012).
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25 / 092013
CEO Pay in the S&P/ASX 200 in 2012
Ownership Matters compared chief executive pay across the S&P/ASX 200 for the 2012 financial year in a report commissioned by the Australian Council of Superannuation Investors.
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25 / 092013
Board composition and non-executive director pay in the S&P/ASX 200
The 2012 board composition study, prepared by Ownership Matters and commissioned by the Australian Council of Superannuation Investors, is the 12th annual review of board composition and non-executive director fees in Australia’s largest listed companies. Overall, the study found that S&P/ASX 200 boards are becoming more diverse, a little greyer over time and an increasing number of directors are being selected to serve on boards for the first time in their careers.
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16 / 052013
Submissions on APRA’s proposal to enhance disclosure by ADIs
Ownership Matters prepared submissions on the proposed remuneration disclosure requirements in APRA’s discussion paper in response to measures introduced by the Basel Committee on Banking Supervision to address deficiencies in publicly available information identified during the global financial crisis.
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