Proxy adviser calls for Australia's ASX shareholders to reject pay report

Sydney, October 1 - Global proxy adviser Institutional Shareholder Services (ISS) has recommended Australian Securities Exchange (ASX) investors reject the company's pay plans, citing executive bonuses that are not aligned with recent performance. ISS argued that the STVR, or short-term variable remuneration, fails to accurately reflect the company's financial results and shareholder returns.

The primary concern, according to ISS, is the misalignment between the STVR outcome and the company's statutory results and shareholder experience. The organization called for a vote against the remuneration report at the upcoming annual meeting on October 22, which marks the first meeting under the new CEO Anthony Attia. The ASX has faced increasing scrutiny from investors and regulators over its governance and ability to deliver market infrastructure following several platform outages and other missteps.

Despite this, ISS noted that the board did not reduce the bonus pool, which remained at 100% of the target. Half of the bonuses were based on non-financial performance measures, some of which were similar to executives' day jobs, such as employee engagement. The ASX received a first strike in 2024 for similar concerns regarding executive bonuses but avoided a potential board spill when shareholders approved the pay plans last year.

Another proxy advisory firm, CGI Glass Lewis, recommended shareholders endorse the pay report at the upcoming meeting, acknowledging operational progress, including the delivery of the first phase of the new Clearing House Electronic Subregister System.