ASX 300 companies are seeing an increase in shareholder activism, in the form of a record number of board spill votes and growing scrutiny over executive compensation. This increased pressure could lead to significant changes in corporate governance and impact market sentiment.
ASX 300 Companies Face Record Board Spill Votes
The ASX 300 has seen a notable increase in board spill resolutions, with 29 votes recorded in 2024, the highest since the introduction of the “two-strikes” rule. This rule allows shareholders to call for a board re-election if more than 25% vote against the remuneration report in two consecutive years. Simultaneously, median granted CEO pay jumped 25% to AU$4.4 million, intensifying shareholder scrutiny and raising concerns about the alignment of executive compensation with company performance.
Top Australian Brokers
- Pepperstone - Top Australian broker - Read our review
- eToro - Invest in ASX and international shares - Read our review
Source: Dilligent
Companies like Lovisa, Dicker Data, and NRW Holdings have faced multiple consecutive remuneration report strikes, indicating persistent governance challenges. Lovisa’s CEO, Victor Herrero, for example, received a realized pay of $39.55 million in 2024, placing him among the highest-paid executives in Australia.
Macquarie Group also faced significant shareholder opposition regarding its executive compensation practices. CEO Shemara Wikramanayake earned AU$30 million in 2024, making her the highest-paid CEO among ASX 100 companies. Following shareholder backlash and regulatory scrutiny, Macquarie’s share price experienced a 5% decline, reflecting market concerns.
Reuters reported on February 6, 2025, that “40 of Australia’s 300 largest companies faced more than 25% of shareholders voting against their remuneration plans.” This near-record level of dissent underscores ongoing investor concerns over executive pay structures and corporate governance.
ASX 300 Analyst Summary
Bull Case
- Increased board accountability may improve long-term company performance.
- Shareholder activism can drive positive changes in corporate governance.
- Heightened scrutiny encourages more responsible executive compensation practices.
Bear Case
- Governance challenges may lead to instability and stock volatility.
- High CEO pay amid economic challenges fuels shareholder dissatisfaction.
- Repeat remuneration strikes signal deeper, unresolved corporate issues.
The rise in shareholder activism and scrutiny over executive pay is expected to continue influencing market sentiment. Companies facing governance challenges may experience increased volatility in their stock prices as investors demand greater accountability and alignment between executive compensation and company performance.
