8 questions lodged at 2025 Aristocrat Leisure hybrid AGM
February 21, 2025
Below is the text of the 8 written questions submitted at the 127 minute Aristocrat Leisure hybrid AGM held in Sydney on February 20, 2025. See notice of meeting. No early disclosure of the proxies in the formal addresses or extra data in the poll results and biggest proxy protest was 23% against the CEO's LTI grant. The market cap was $48b going into meeting but stock fell 5% on the day. All these questions were read in full with no censorship and about 5 shareholders contributed to the debate from the floor but I was the solo online participant. Asked 2 general questions and then 1 multi-pronged question on each of the other items, navigating through the chair's 2 question limit per resolution, which is reasonable.
Accounts and general business questions
Q1. Two years ago, the chair said our Australian market share in the EGM market was around 50%. Light and Wonder has been making a lot of noise about market share gains in Australia of late. Is it correct that we no longer have more than 100,000 installed EGMs in the Australian market? Roughly how many EGMs do we currently have inside Australia's 5,000 gaming venues?
Answer: CEO Trevor Croker said they were historically above 50% market share and were returning to those levels in January and February in terms of new shipments. Watch video of exchange via Twitter, plus these additional Trevor Croker comments at the end. Also watch this detailed scripted response earlier in the meeting from chair Neil Chatfield about the Light and Wonder litigation when asked about it by shareholder Greg Winter. Also see these Chatfield comments saying the full board met with Australian pokies customers this week, something they also do in the US.
Q2. There has been a lot of media about the financial troubles at Star Entertainment, one of our largest customers in the Australian market. For instance, the Brisbane Broncos have allowed them to delay contracted sponsorship payments. If Star does go into administration as many observers expect, where would we rank in the creditor stack? Have we offered one of our biggest customers financial support during this difficult time and roughly how many machines do we have installed on their gaming floors in Sydney, Brisbane and the Gold Coast?
Answer: chair Neil Chatfield declined to engage on specific customer issues. Watch video of exchange via Twitter.
Director election questions
Q3. This meeting is a milestone because there has never been an AGM of an ASX100 company with 4 endorsed female candidates up for election and no male candidates. However, there is increasing blowback against diversity after the election of Donald Trump unleashed a massive campaign against so-called DEI programs in the US. Indeed, the ASX yesterday abandoned proposed changes to its listing rules which would have seen increased diversity reporting. As the first candidate up for election today, what value does Arlene Tansey see in Aristocrat's diversity programs and is she committed to supporting it for as long as she serves on this board?
Answer: Watch video of exchange via Twitter, plus these additional comments where Arlene Tansey strongly backs Aristocrat's diversity policies.
Q4. Sylvia Summers Couder has served continuously on the Aristocrat board since before Donald Trump was first elected President in November 2016 and currently resides in the US. What does Sylvia see as the risks and opportunities for Aristocrat in the second Trump presidency and could CEO Trevor Croker, who resides in Las Vegas, also comment on whether Trump, as a former casino owner, is regarded as being generally supportive of the gambling industry, and whether there are threats that tariffs and an associated trade war could damage our business. Could we come under pressure to redomicile to the US as the nationalistic policies of the Trump administration role out. Have we looked into doing this?
Answer: Chair Neil Chatfield said they review the ASX listing every year and only included last November, just as Trump was getting elected, not to move to the US. For now! Watch video of exchange via Twitter, plus these additional Trevor Croker comments about Trump and this interesting contribution from Sylvia.
Q5. As the longest serving director having joined the board in 2014, could Kathleen and the chair comment on whether this will be her final 3 year term and that she won't be seeking re-election in 2028? What is the board's approach to tenure and independence and do the chair and Kathleen believe the concept of term limits will come under pressure as part of the broader push back against ESG globally, led by the Trump administration. As our most experienced director, could Kathleen also comment on whether she believes Australia will move to a fully cashless EGM market before the end of this 3 year term and whether this is a key risk to our profits in the near term, especially given the early negative impact on this move seen at Crown and Star?
Answer: Watch video of exchange via Twitter, plus these cashless pokies comments by CEO Trevor Croker and this encouraging contribution from Kathleen Conlon on diversity and tenure. Sounds like she may not serve a full term, despite being one of the best professional directors in the Australian market.
Q6. Could new director Natasha Chand and the chair comment on the recruitment process that led to her appointment to the board. Which head hunting firm supported the process, did the full board interview Natasha as a group or was it done individually and did they interview any other candidates? Did Natasha know any of our directors before engaging with the recruitment process?
Answer: chair Neil Chatfield waffled on about the process without disclosing whether it was a competitive process. Watch video of exchange via Twitter, plus these additional comments by Natasha clarifying that she didn't know any of the incumbent directors, which is good.
Remuneration items
Q7. Thank you for running a good hybrid AGM with video and for following the agenda dealing with each item one at a time. Next year, could you please disclose the proxies early to the ASX with the formal addresses. Also, best practice is now to disclose the poll results by including for and against votes by both shares and shareholders, like with a scheme of arrangement. This provides a better gauge of retail shareholder sentiment on all resolutions and insight into the chronically low retail shareholder participation rate. Are you prepared to do this, given many others now do such as Qantas, ASX, Suncorp, Tabcorp, Myer, Computershare and even Technology One for the first time yesterday? I'm sure that all retail shareholders in the room today would like to know how many shareholders voted for and against this particular resolution approving another LTI grant to the CEO and voluntary scheme-like voting disclosure will do this.
Answer: chair Neil Chatfield waffled on about why none of this could be done and then flashed up the 23% LTI protest vote at the end of his answer, proving exactly why the proxy votes should be disclosed early because the 127 minute AGM received no explanation from the board as to what caused this protest vote. Watch video of exchange via Twitter.
Q8. Did any of the 5 main proxy advisers - ACSI, Ownership Matters, Glass Lewis, ISS and ASA - cover us this year and recommend a vote against any of today's resolutions, including this remuneration report item? If so, what reasons did they give and did this translate into any material protest votes? Please don't say they are confidential. It is standard for companies to be across this detail on the voting recommendations and inform shareholders where relevant.
Answer: chair Neil Chatfield ducked this one, misleadingly suggesting there were no protest votes or against recommendations when 23% of voted stock on the proxies opposed the LTI grant and 7% opposed the remuneration report. Watch video of exchange via Twitter.
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