8 questions asked at 2024 Steadfast hybrid AGM

November 17, 2024

Below is the text of the 8 written questions submitted at the two hour Steadfast hybrid AGM held in Sydney on November 1. The proxies were disclosed early with these formal addresses and the biggest protest was 15% against the rem report.

Q1. I watched the Four Corners program and was shocked by the 11% slump it caused in our share price, from which it is yet to recover. One of the most puzzling aspects was the public position of our CEO Robert Kelly that he wanted more transparency and disclosure for the benefit of strata consumers, yet we then participated in schemes such as Resolute Property Protect, Collective Insurance Brokers & Coverforce Insurance Brokers, which were seemingly designed to share with strata management firms earnings on broker fees, which are not required to be disclosed, as opposed to formal broker 'commissions'. Mr Kelly himself said clearly in the program that the purpose of Resolute, for example, was to channel funds to strata managers, and that it was 'wrong' that this wasn't always disclosed to end-consumers. Could the chair please provide his perspective on why our words in favour of consumer transparency in this matter, seemingly do not match our deeds?

Answer: after it was all laid out without interruption, chair Frank O'Halloran had nothing new to add, but did offer up the old "I'll talk to you after the meeting" line. Watch video of exchange via Twitter.

Q2. The chair has this morning called unspecified aspects of the Four Corners report "misleading". Which parts were misleading? From my perspective, one confusing aspect of the 4 Corners story was the way our company seemingly changed its story on multiple occasions about the Mark Swain case. In the end, our company claimed it didn't actually know how the rival SCI quote came to be withdrawn in its BCB broker report; it said the quote was either withdrawn by SCI verbally (which SCI denies, and which clashes with the contemporaneous records), or that Steadfast of its own volition withdrew it 'on behalf' of SCA, which SCA says it did not authorise or have knowledge of. Could chair Frank O'Halloran please provide his version of the facts in the Mark Swain case and what lessons have we learnt from this? Is this what he was talking about when accusing Four Corners of broadcasting misleading material?

Answer: The Mark Swain case is complicated so perhaps just watch this video of the exchange for yourself. The chair painted his CEO as a heroic campaigner for insurance industry transparency and the CEO also talked up the veracity of his recent Senate committee appearance by stressing that he can go to jail for lying to the Senate.

Q3. Why did our CEO Robert Kelly suddenly resign from the board of Johns Lyng on September 27, after 7 years of service, without any explanation? Is it because of conflicts of interest with Johns Lyng being the largest player in Australia's strata management industry through its Bright & Duggan division. Was Mr Kelly and Steadfast influential in persuading Johns Lyng to move into that business in 2019? What is the history of our investment in 5 million Johns Lyng shares and given it is only a 2% stake in the business, how did it give us an entitlement to a board seat? Whose idea was it for Robert Kelly to quit the Johns Lyng board and is it correct he was facing an uphill battle to get re-elected at the Johns Lyng AGM on November 13 when his latest 3 year term was due to expire, both in terms of receiving unanimous Johns Lyng board endorsement and then securing proxy adviser and investor support. Please fully explain the relationship between Steadfast and Johns Lyng.

Answer: it would have been better to just read out the lot and offer one answer. Instead, it got turned into the most broken up online question I've ever asked at an AGM and here are links to 5 videos of the various components:

Why did Robert Kelly suddenly quit Johns Lyng board?

Robert Kelly never saw the conflict of being on both boards

The history of Robert Kelly's journey onto the Johns Lyng board

Why did Robert Kelly choose to quit the Johns Lyng board now

Laying out the historic and ongoing connection between Steadfast and Johns Lyng.

Q4. The tag team of chairman Frank O'Halloran and CEO Robert Kelly has been in place at the top of this company for the past 11 years since the 2013 float. How old are they both and what is the plan in terms of who will retire first? Is Frank O'Halloran planning to stand for another 3 year term at the 2025 AGM and what is he doing to manage CEO succession as our founder Robert Kelly will surely have to retire at some point? Also, does the chair agree that in hindsight, it was a mistake for the CEO to agree to an on-camera interview with Four Corners, which didn't go well for us?

Answer: The opening response extracted that Frank is 78 and Robert is 77, although Frank thought his CEO was still 76. Then, in the next response, both locked in for at least another 12 months and in this component, Frank O'Halloran warned about "falling down the ladder" without leadership renewal. Indeed. And Frank certainly wasn't going to say it was a mistake by his passionate CEO to appear on 4 Corners.

Q5. Could new director Andrew Bloore and the chair comment on the recruitment process that led to his appointment to the board 12 months ago. Was a head hunter involved, did the full board interview Andrew and did they interview any other candidates? Did Andrew know any of our directors before engaging with the recruitment process? Also, what did Andrew think of the Four Corners report and how did he and the other directors respond? It is not easy being a new director at a company with legendary long term leadership. Are chair Frank O'Halloran and CEO Robert Kelly open to challenge, criticism and change, in Andrew's experience?

Answer: Frank O'Halloran said the only Steadfast director Andrew Boore knew before engaging with the recruitment process was founder CEO Robert Kelly. That's telling! Watch video of exchange via Twitter. Chair Frank O'Halloran was the main respondent to this component asking Andrew what he thought of Four Corners.

Q6. There was a 13.75% protest vote against Mr Kelly's LTI grant at last year's AGM and a 14.5% protest in 2022. Have we made any changes to the structure this year, including to take into account reputation issues after the 4 Corners program. Also, could the CEO summarise his past LTI grants as to whether they have vested or lapsed. Has Mr Kelly ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company? Please don't say look it up in the annual report and through ASX announcements. It's complicated and the CEO could factually summarise the situation in 60 seconds.

Answer: we were all a little at cross purposes on this one - watch video of exchange via Twitter.

Q7. Why was there a 15% rem protest?

Answer: the rem committee chair explained that some investors were concerned about the increase in base pay for CEO Robert Kelly.

Q8. What did veteran insurance broker and long serving Steadfast director Greg Rynenberg think about Four Corners?

Answer: In short, "It wasn't true, no" - watch video of exchange via Twitter. Also, watch Greg's interesting campaign speech.

And to conclude, watch Frank O'Halloran's final flourish to close the meeting when he says "it's all about the shareholders". Not sure too many people living in strata managed communities would be thrilled to hear that.

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8 questions asked at 2024 Steadfast hybrid AGM

November 17, 2024

Below is the text of the 8 written questions submitted at the two hour Steadfast hybrid AGM held in Sydney on November 1. The proxies were disclosed early with these formal addresses and the biggest protest was 15% against the rem report.