6 questions lodged at 2024 Synlait hybrid AGM

Q1. Will the chair commit to having a formal board discussion about putting up the Synlait remuneration report for a non-binding advisory vote at next year's AGM, complying with the legal system in Australia. Seeing as we are dual listed on the ASX, shouldn't we embrace Australian Governance standards? If not, don't we risk New Zealand being viewed by international investors as a governance backwater given that remuneration report voting has become standard in many countries.

Answer: The chair George Adams said other shareholders have raised this and they'll look at it. Watch video of exchange via Twitter.

Q2. It is very unusual for a public company to announce the resignation of a CEO, effective immediately, but that's what we did with Grant Watson on October 21. The ASX announcement was pretty threadbare as to why this has happened. Please advise which recruitment firm has been retained to assist with the search for a replacement and what are the salary arrangements for acting CEO Tim Carter during the period in which he acts? Also, is Tim a candidate for the job permanently and what sort of exit payment did Mr Watson receive?

Answer: The chair George Adams denied it was unusual, said Korn Ferry had been retained, declined to reveal the payout until next year's annual report and made it pretty clear the acting CEO was a candidate. Watch video of exchange via Twitter.

Q3. Fonterra recently announced it is ending its dual listing on the ASX to save money. How much extra does it cost us to be dual listed in Australia & NZ & if we were to delist from 1 of those exchanges, which would make more sense given the current split of the register & trading data. Restaurant technology company Task shifted its HQ & primary listing from New Zealand to Australia last year and was then taken over by a US firm. Have we looked at doing the same?

Answer: The chair scoffed at the suggestion they would talk to Fonterra about anything and said the ASX listing only cost around 80–100k so was worth retaining. Watch video of exchange via Twitter.

Q4. On November 29 we announced that PwC had been replaced as external auditor by KPMG, because that's who audits our major shareholder, Bright Dairy. Is this really the way to run our external audit arrangements? Are KPMG going to cost more or less than PwC and why didn't we run a full tender? How long has KPMG audited Bright Dairy and when was that job last tendered?

Answer: The chair defended the move and said it would cost around the same. Watch video of exchange via Twitter.

Q5. NZ AGMs are boring because there are so few things to vote on, unlike in Australia with the annual remuneration report vote, plus many resolutions to approve share issues to CEOs. In 2019, ASX-listed Treasury Wine Estates voluntarily moved to annual elections for directors in line with best practice that occurs in both the US and the UK. BHP also does this. Could the chair and re-election candidate George Adams please comment on whether he would support moving to annual director elections starting at the 2025 AGM, in order to lift board accountability to shareholders and give us more items to vote on.

Answer: The question wrangler failed to read this in full and the chair said just "no". Watch video of exchange via Twitter.

Q6. Could Sihang Yang please comment on why he supported the move last week to replace our former external PWC with Bright Dairy's auditor, KPMG. Also, does Sihang support a move to annual director elections for better accountability to all shareholders? Also why did Bright Dairy select him to serve on our board?

Answer: The candidate gave an interesting campaign speech, which finished with a "let's make it happen" flourish at the end. Chair took this one as the question wrangler broke it up into parts but Sihang could be heard saying he doesn't support annual board elections. Watch video of exchange via Twitter.

Copyright © 2024 The Mayne Report. All rights reserved

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