14 Questions asked at 2021 Charter Hall AGM

November 12, 2021

Below are the 14 written questions lodged at the 2021 Charter Hall AGM held on November 11, with all but two of them asked.

1. Did any of the 5 main proxy advisers in the Australian market - ACSI, ASA, Ownership Matters, Glass Lewis and ISS - recommend a vote against any of today's resolutions, including the remuneration report? Has their been a material proxy protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on today's resolutions so shareholders can ask questions if there have been any protest votes?

Answer: Yes, there's an issue with the retention bonus grant as you'll see later.

2. The AFR reported this week that Australia's biggest auditor PwC has used dozens of unqualified workers, on lower salaries and with less training and resources than their main office counterpart, to complete audit work for large listed clients from an unbranded office in western Sydney's Parramatta. Could our PwC auditor Ewen please comment on whether this is true and whether any Charter Hall auditing was done from this office. What is the Charter Hall reaction to this revelation?

Answer: Auditor read a prepared statement saying that the Parramatta office was used but all staff were overseen by qualified professionals.

3. Why is Charter Hall moving so aggressively into gambling with the proposed acquisition of ALE Group, Australia's biggest owner of pubs with addictive poker machines? Are you prepared to get involved to drive more responsible practices such as not allowing the Victorian venues to stay open the maximum 20 years a day. Nothing good will be happening at all these Charter Hall pokies pubs at 3am?

Answer: chair David Clark said Endeavour Group was responsible for everything and that pokies were only “one small part” of the revenue stream. Wrong, try almost 50%.

4. Charter Hall branded listed entities have raised billions of dollars through multiple equity raisings over the past decade. Why have you never done a PAITREO capital raising which treats all shareholders equally and compensates non-participants. The biggest losers in Australia's anything goes capital raising system is the retail shareholder who fails to respond to an offer. That is usually a majority of retail investors even when an offer is in the money. Please embrace the PAITREO to stop these retail shareholder rip-offs.

Answer: chair David Clarke made no commitments and didn't seem to understand the benefit of the PAITREO. Claimed rights trading is uncommon these days when there have been 6 so far in 2021.

5. Ten years ago, our chairman David Clarke was effectively forced off the AMP board due to the stench surrounding the collapse of Allco Finance Group, where David was installed as CEO late in the day, arguably when it was too late to save as the GFC hit. Could he comment on whether he feels a sense of redemption given the outstanding financial performance of Charter Hall, particularly in recent years. What lessons did he learn from the Allco collapse?

Answer: wasn't asked as chair censored this one.

6. In February 2010, we bought Macquarie's Australian property platform. With the benefit of hindsight, was this the most important and value accretive deal we've done as a listed company? Macquarie was placed 10% of Charter Hall as part of that deal. When did they sell out and was the exit profitable for Macquarie.

Answer: chair said acquisition was strategically very important to get scale and CEO described it as a “win-win” given that Macquarie sold out 3 years later doubling their money.

7. I'm a local government councillor at City of Melbourne in Melbourne's eastern suburbs. Council's are traditionally inert and uncommercial when managing their own billion dollar property portfolios and are reluctant to partner up with major property sector players. Can the CEO cite examples of councils across Australia which have sensibly partnered with Charter Hall in arrangements which have delivered good outcomes for all stakeholders.

Answer: CEO cited Charter Hall's ownership of the Brisbane City Council head office and bus depot.

8. Jacqueline Chan currently sits on 3 major board and also continues to work as a management consultant for McKinsey. This is unusual for a professional director. Could she please provide more information about her McKinsey arrangement, including how conflicts are managed. How much time each week is she spending on McKinsey matters?

Answer: the McKinsey work only amounts to about 1 day a month.

9. The CEO owns 1.413 million ordinary shares worth $26.7 million based on the current price. He has done extremely well for shareholders. Is he concerned about the shareholders opposition to his LTI and how important is this grant to keep him motivated?

Answer: CEO didn't comment and chair deflected on the protest vote saying this scheme hadn't changed in years. He was right, as it was the later retention bonus which had the big protest vote.

10. What is the actual intention in terms of board fees once this item is approved? Don't be afraid to give yourselves a pay rise given the performance has been so strong?

Answer: thanks for the praise, nothing planned as yet.

11. What specifically did the proxy advisers say was the problem with these LTI grants. The proxy opposition was substantial. Are we going to change the structure?

Answer: not proposing any change.

12. Were you influenced by Dexus which also went for an unnecessary retention plan and suffered a big shareholder backlash. Have any other listed property companies tried something similar?

Answer: not asked as filed it too late.

13. When disclosing the outcome of all resolutions, including this fee cap rise for the NEDs, will the chair agree to publicly disclose how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative recently adopted by Metcash and Southern Cross Media after their AGMs.

Answer: no commitment.

14. Given the interesting discussions across a range of topics today, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website. AGM transcripts have been recently provided by other major companies like ASX, Woolworths, Crown Resorts and AGL and given the retention grant discussion in particular, all shareholders should have access to a full transcript.

Answer: just the webcast.

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