7 written questions lodged at 2024 Stockland hybrid AGM
November 4, 2024
Below is the text of the 7 written questions submitted at the 90 minute 2024 Stockland hybrid AGM held on October 21. No early disclosure of proxies with formal addresses and biggest protest vote 28% against director Melinda Conrad.
Q1. Thank you for consistently holding hybrid AGMs since the pandemic (in contrast to scrutiny-adverse Mirvac which has ditched the online component for the past 2 years) & consistent with the good hybrid AGM practices of other major property groups such as Goodman, Dexus, Vicinity & Scentre Group. However, you continue to resist disclosing the proxy position to the ASX along with formal addresses & also haven't yet got with the program of voluntarily using scheme-like voting disclosure which shows how many shareholders voted for & against each item. Such disclosure provides a better gauge of retail shareholder sentiment and insight into the chronically low retail shareholder participation rate. Others like Qantas, ASX, Myer, Dexus, Tabcorp & Webjet already do this. If you don't propose to do this, can you at least advise the meeting roughly how many of our circa 45,000 retail shareholders participated in this AGM either by voting or attending. Was it even 2%?
Answer: The chair Watch video of exchange via Twitter.
Q2. Australia is currently in the midst of an unprecedented deluge of takeovers that has contributed to listed entities on the ASX falling by 170 or 7.4% to 2,124 since June 2022, including 20 straight months of declines. There have already been 27 major takeovers above $200m completed so far this calendar year with another 10 deals announced and in the works. The ASX is losing long standing big cap names such as CSR, Boral, Blackmores, Ausnet, Newcrest, Altium and Crown Resorts which have all disappeared over the past 3 years. There is a clear mis-pricing between public markets and private markets. Why are public markets not valuing ASX listed companies like ours more highly and what are we doing to avoid being gobbled up like so many other companies companies. Does the chair agree this is a problem for the nation, particularly with so few new floats replenishing the ASX ranks?
Answer: The chair Watch video of exchange via Twitter.
Q3. On p184 of the annual report you list the substantial shareholders being Blackrock with 242.7m shares, Vanguard with 230.3m shares & State Street with 213.2m. Will you agree to include the % holdings these represent in next year's annual report & is it a concern that the 3 big global index funds collectively own 686.2m shares or some 28.2% of our $12.93b company with an investment worth $3.65b based on Friday's closing price of $5.33? The big 3 index funds have bigger collective holdings in ASX listed property companies than any other sector because they sell so many "Australian property ETFs" to clients around the world, but how much is too much? Do these global index players have the time to take governance seriously at Stockland, with individual meetings & engagement or do they just offload their voting decisions to the proxy advisers? And do you know roughly how much of those 686.22m votes are controlled by the big 3 funds themselves & how much are retained by investor clients?
Answer: The chair Watch video of exchange via Twitter.
Q4. The so-called housing crisis is dominating much of the media and we appear set for a national election based around housing in 2025. Could the CEO comment on what he thinks about Peter Dutton's recently announced $5b plan to support housing infrastructure in urban fringe growth areas & also whether he has an early view of the decision announced by the Victorian Govt over the weekend to seize planning powers, reduce appeal rights and rezone land around 50 designated transport hubs and activity centres across Melbourne? What aspects of the debate & policy response to the housing crisis so far does the CEO welcome & what more would he like to see happen? Also, as an international student himself who stayed and prospered, what does Tarun think about the current immigration debate in Australia & how important are international students for our business?
Answer: The chair Watch video of exchange via Twitter.
Q5. It is great that Stockland has a CEO in Tarun Gupta who came to Australia as an international student from India in 1991 and never left. Tarun gave an excellent answer to the LTI history question at last year's AGM and I was impressed with his 2021 interview on SBS Hindi, telling the story of his journey in Australia. I didn't realise until reading that last night that he spent 26 years at Lendlease until we poached him in November 2020, starting in June 2021. Lend Lease shares have fallen from about $13 to $6.92 since our poaching coup was announced, whereas Stockland shares have risen from around $4.30 to $5.33 over the same period. Is Tarun glad he left Lendlease when he did, does he feel at all responsible for past decisions which have gone bad there and does he believe the Lendlease share price would be higher if he'd stayed? Also, how does this LTI incentive scheme we are approving today differ from his incentive scheme at Lendlease?
Answer: Some of the Lendlease elements were censored by question wrangler Katherine Grace. Watch video of exchange via Twitter.
Q6. It is pleasing Stockland's market cap has pushed up to $12.93b, against our claimed net assets of $9.89b, so the market is currently seeing $3b of value that we can't. Given REITS tend to revalue their property investments every 6 months rather than going with historical cost accounting, why are we being so conservative with our valuations? Could auditor Jane Reilly comment on whether she believes we are being more conservative on the $10b valuation for our investments or the $4.05b valuation for our property "inventories" as these figures were both identified in her key audit matters summary. Also, could the audit committee chair or CFO comment on the following: if we did declare a $3b non-cash profit next year after writing up our investment portfolio, would this generate additional tax liabilities for shareholders from a cash flow point of view, as opposed to maintaining the current valuations?
Answer: The chair Watch video of exchange via Twitter, plus these comments by the auditor. Also, see separate cautious response from the chair on the tax question.
Q7. After spending 8 years as CEO of our competitor GPT, Bob Johnson finally departed their board on March 4 this year & his exit shareholding was 2.32m ordinary shares worth $11.6m if retained today & a further 917,768 performance rights which may vest over the next 2 years if our competitor does well. As a GPT shareholder, I'm disappointed there was no meaningful restraint on Mr Johnson from taking all his contacts & IP into a competitor's board room just 6 months after departing as CEO, particularly with LTI incentives still in play. And as a Stockland shareholder, I'm disappointed he is yet to buy a single share in our company & currently has a greater incentive to see our competitor prosper than us. It seems this switch was conducted with indecent haste. Could Mr Johnson please comment on what constraints applied when he left GPT & whether he has sold down since supposedly retiring. Also, why was Bob appointed to fill a casual vacancy 3 weeks ago? Couldn't that have waited until today's vote?
Answer: Terrible censorship by chair Tom Pockett who addressed none of these issues and didn't even ask Bob Johnson to comment at all - watch video of exchange via Twitter.
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