Tabcorp Holdings (TAH) 2015 AGM Report

Company/ASX Code : Tabcorp Holdings Limited (TAH)
Venue :
10am The Ballroom, Langham Hotel
1 Southgate Avenue, Southbank
Melbourne, Victoria
Monitor : Mr John Curry
AGM Details / NoM : Thursday 29th October, 2015
# of Attendees : 120 shareholders plus 150 visitors
# Holdings represented by ASA : 452
Value of Proxies : $8.97 million
# Shares Represented by ASA : 1.9 million
Market Capitalisation : $4 billion

Tabcorp looks to the Spring Racing Carnival

The profit after tax from continuing operations for Tabcorp in 2015 was $171.3 million – up 14.7%, with revenue up 5.7%. The fully franked dividend for the year was 20 cents per share, plus a special dividend of 30 cents per share paid in March 2015. The ASA congratulated the board on finding a capital management programme, via a renounceable rights issue, that allowed significant franking credits to be distributed to shareholders. For the past three years the ASA has been urging the Board to adopt such a programme.

Tabcorp is pleased to see that a government review is proposed into illegal offshore wagering and hopefully this will also lead to a level playing field in Australia. The Northern Territory has licensed bookmakers that pay a fraction of the tax that applies in other Australian States.

Tabcorp has appealed to the High Court claiming $686 million as a result of cancellation of arrangements with the Victorian government some years ago. The hearing is scheduled to commence on 10 November 2015.

Revenue for the three months ended 30 September 2015 was 1.1% ahead of the revenue earned in the first quarter last year.

The senior management team is made up of 33% female employees and the target is 40% by 2018.

The ASA voted undirected proxies for the re-election of Elmer Funke Kupper and the resolution was approved by 85% of voting shareholders.

The ASA voted undirected proxies in favour of the re-election of Stephen Gregg as a director. However the ASA noted that Mr Gregg only owns 15,000 shares in Tabcorp and ASA guidelines state that after three years a non-executive director should hold shares equal to one year’s director’s fees. In his case this would equal about 29,000 shares. Mr Gregg was re-elected by 99% of voting shareholders.

The ASA voted undirected proxies against adoption of the Remuneration Report. In the view of the ASA the term of the Long Term Incentive Plan (LTI) should be four years – not three, and there is only one performance hurdle being Total Shareholder Return. The ASA believes an additional performance hurdle should be adopted. The ASA also opposed vesting 50% of the LTI when the 50th percentile of the comparator group is reached. ASA guidelines recommend 30%. The ASA pointed out that Mr Funke Kupper is a Director of Tabcorp and is also CEO of ASX Limited. ASX commences vesting at a lower level of 25%. The resolution was approved by 94 % of voting shareholders.

The ASA voted undirected proxies against the resolution to grant performance rights to the Managing Director, because of the deficiencies mentioned in comments covering the Remuneration Report. The resolution was approved by 89% of voting shareholders.

The Chairman advised that from the 2016 year, market value will be used for assessing the number of performance grants for executives, rather than the fair value used at present.

Resolution 5 sought approval to grant additional equity to the Managing Director following the rights issue in March, to restore value to his earlier grants.

The Chairman explained that on the basis of proxies held, the resolution would have passed, but there was concern amongst some proxy advisers that the resolution should not proceed and the resolution was withdrawn.

The ASA representative was the only person to ask questions and make comments at the meeting.