G'day Towie. It's a two strike system where if 25% of votes cast against the Remuneration Report at an AGM rejects the Report, that is called the first strike and if at the next meeting it is rejected for the second time, the ‘second strike’ occurs.
When a ‘second strike’ occurs, the shareholders will vote at the same AGM to determine whether all the directors will need to stand for re-election. If this ‘spill’ resolution passes with 50 per cent or more of eligible votes cast, then a ‘spill meeting’ will take place within 90 days.
There is no guarantee that that next vote or any subsequent vote will result in a change in the Board, but, it is supposed to give disgruntled shareholders an opportunity to let the Board know how they feel and have a some chance of actually having them removed. You'd expect that the Board would "get the message" to avoid that second strike.
Important to note that it's 25% of the votes cast at the AGM and Directors on the Board cannot vote.
So, it's pretty hard to determine how many votes would be needed because you won't know how many other votes are cast, but, you can get a good idea how many by going back to last year's results,particularly with LNY, where you can have a good idea how many votes CAN'T be cast.
LNY Price at posting:
0.3¢ Sentiment: None Disclosure: Held
