It was a bit of a mixed bag of AGMs last week, as well as proof that being a blue-chip company doesn’t necessarily mean you deliver a top-class AGM.
The really exciting aspect of the past week’s AGMs is that all four of the meetings attended by Currency offered an in-person option.
Actually, that’s not entirely true. In KAP’s case it wasn’t really an option – you could attend in person or not at all. How quaint is that?
We do need to point out, as this is the middle of AGM season, that there were a lot more than four AGMs last week. Currency was only able to get to four – KAP, Woolworths, Remgro and FirstRand. We missed Discovery, Outsurance, EOH, Blue Label Telecoms, Hyprop Investment, Ascendis Health, DRD Gold, Harmony, Growthpoint and Super Group.
Woolworths’ AGM, which was hosted on the Lumi platform, got the week off to a good start, and the company seemed on track to score full marks for a very polished performance. The hybrid offering secured an early 15 points for the up-market retailer, with the ease of access for guests ensuring another five points.
Chair Hubert Brody, who retired after the meeting, kicked off with clear instructions on how the programme would unfold and kept a firm hand on the tiller throughout. He introduced the shareholders to all the directors in attendance; most were there in person, but a few attended virtually.
It was evident that the team in charge had listened to last year’s complaints about a low-level sense of antagonism, due in large part to the cramped seating conditions.
This year’s more spacious conditions contributed to a generally upbeat atmosphere though, sadly, few shareholders attended in person.
The company gets the full 20 points for a smooth, glitch-free meeting.
Sadly, it wasn’t able to crack the technology needed to allow verbal questions from shareholders attending online – of which there were quite a few. All those questions had to be submitted in writing and were read out, very well, by the company secretary.
The company assured Currency that it was working on the technology, which surely can’t be as difficult as transporting millions of tons of fresh food from one end of the country to the other. Hopefully it will be sorted for next year, but for this year Woolworths loses three out of the 10 points.
There were some great questions, including a few about the on-demand delivery platform Woolies Dash. These grocery delivery services are becoming controversial from a number of perspectives, and it’s hard to imagine government will refrain from upping the regulations. A move that will inevitably skew the profit profile of the service.
Brody’s response to Dash-related questions as well as executive remuneration were limp and unpersuasive. The group’s CEO is so generously paid that once again a large chunk of shareholders voted against the remuneration resolutions this year.
When asked for a comment on the very high wage gap, Brody’s response was: “We agree the wage gap is large throughout the world” – evidently not wanting to address the fact that in 2023, CEO Roy Bagattini’s R122m meant the group suffered the dubious distinction of having the widest pay gap in the retail sector on the JSE. Brody’s suggestion that the gap would look more reasonable if the base minimum wage in the organisation included all the perks is risible given the value of those perks.
So, Woolworths gets just 13 points for its unimpressive Q&A session. Plus, the fact that information promised to one of the shareholders within hours hadn’t been sent five days later.
The group published easily accessible and detailed minutes of the 2023 meeting for which it gets the full five points.
This gives Woolworths a total of 65 points out of a potential 75.
Topping the table
Next up was Remgro, also on the Lumi platform, which scored the full 15 points for its hybrid offering and five points for ease of access.
Again – is this a Lumi thing? – the questions from online attendees had to be read out by the company secretary, so that means Remgro gets just seven points out of a potential 10.
Amazingly, though there were about 150 people in attendance in person and another 70 or so attending online, there were less than a handful of questions. Mind you, less than a handful is enough to get chair Johann Rupert going. Indeed, if it’s good, then one question is often enough. And this time shareholder activist Chris Logan did the honours.
Logan was worried about the group’s deteriorating earnings performance and asked why executive management weren’t required to spend more of their money investing in Remgro shares. This, Logan believed, would introduce the sort of entrepreneurial drive needed to rescue the group’s earnings record.
Rupert seemed to suggest Logan had a point about the importance of alignment but said Logan needed to look at the broader picture. “I’m happy the team is working hard; I don’t think they could work harder.”
He then went on to demonstrate why more than 200 investors regularly attend his AGMs and why he carries the moniker “Rupert the Bear”. It’s down to his annual, often downbeat, discussion of the problems currently facing the world. And there are lots – the growing sense of envy across the globe, underpinned by social media “where people only post their best moments not their horrible ones”; the winner-takes-all principle driving the modern economy; financial engineering overtaking proper engineering; the fact that the private sector in South Africa didn’t invest enough in the earlier days of democracy. On a more upbeat note was his belief that incoming US president Donald Trump will use his trade muscle tactically; Stellenbosch’s invigorated soccer league; and, finally, the fact that Remgro does not only serve shareholders – “we have a wider obligation to the community we live in”.
While some of his “answers” might not have been totally on point, it would be churlish not to award 20 points for the Q&A section of the meeting.
So, the only thing stopping Remgro from scoring a full 75 points is the absence of minutes. What’s that about? Still, the group scored an impressive 70 out of a possible 75 points.
A bit of an embarrassment
Then there was FirstRand on the Computershare platform. All in all, the performance from this blue-chip banking group turned out to be a bit of an embarrassment. Admittedly, it did score a full 15 points for providing hybrid facilities as well as a full five points for ease of access, but from there on things sort of fell apart. It was anything but glitch-free. The link to the meeting kept dropping and given that a lot of shareholders contacted by Currency confirmed they had the same problem, it’s safe to assume it was a FirstRand issue, which is why it scores eight out of a possible 20 for that category.
Things were about to get worse. During the Q&A session Chris Logan (yes that same shareholder activist) wanted to know what was behind FirstRand’s long-term underperformance. After a fairly brief discussion chair Johan Burger decided he’d had enough. He suggested Logan continued the discussion privately with management. Logan said he’d done that before and it proved pointless, so he wasn’t going to waste his time again. He wanted the chair to deal with his questions now. Burger wasn’t interested. “You’re welcome to engage with management … but I think I’m going to close this discussion now.” (Logan’s line goes dead.)
The next question wasn’t going to do anything to cheer up the chair. One of the shareholders wanted to know how it was that Burger was classified as independent when he was appointed to the chair in December 2023. Not an unreasonable question, given that Burger appears to have spent almost his entire working life at FirstRand.
The answer was difficult to grasp, but it was apparently because Burger hadn’t been an executive for a while – he had been a non-executive director – and because there were no factors that would impact his independence. All of which meant that in terms of Alice-in-Wonderland’s King Code he could be declared independent.
At this point Laurie Dippenaar, co-founder, former CEO, former chair, interjected. Dippenaar, who was attending in person said shareholders were “incredibly fortunate” to have Burger as chair. “It’s downright silly and stupid to question his credentials. FirstRand is a large complex company, you need great skills to be chairman and Burger has them,” said an evidently irritated Dippenaar.
Ayabulela Quzu of non-profit group Just Share wasn’t too happy with that interjection. He rather politely told the chair that an AGM was for open discussion, and it was not appropriate to slam any question as silly or stupid.
Moments later the connection dropped and the patchy meeting ended.
So, a bit of a mixed bag for one of the country’s most powerful financial groups. For enabling verbal (as opposed to written) questions for shareholders attending online the group scores 10 out of 10. But the Q&A session really doesn’t deserve more than five out of a potential 20.
Currency could not track down minutes of any previous AGM but understands they are available somewhere. So FirstRand gets two points out of a possible five, bringing its total to a miserable 45 out of a potential 75.
Keeping it old school
And then there was KAP which, in keeping with its slightly old-fashioned industrial holding company status, remains committed to the in-person-only format for AGMs. This novelty meant it was hard to resist schlepping all the way to Stellenbosch on a hot Friday afternoon.
KAP gets zero out of 15 points for not offering an online option, though the board did think the teleconference facility should count for something. Well, no. Who wants to hold on a landline for the duration of an AGM? Even an AGM that only lasted 16 minutes.
The company gets five points for ease of access because I cannot hold it responsible for Google Maps misdirecting me to Dorp Street in the middle of Stellenbosch during the worst of early Friday afternoon traffic. It was 3.09pm by the time I eventually made it to the AGM at KAP’s offices just outside Stellenbosch, where everything seemed to be going quite smoothly. Little did I realise there were only seven minutes to go.
Apart from myself and one shareholder, the 18 people in attendance were company employees, directors or advisers.
No questions were asked.
So here’s the thing, how do you rate KAP or any company that holds in-person-only AGMs on the basis of a system that assumes a modest level of technology? Particularly if not one question is asked? We’ll work something out.
Happily, it turned out not to have been a wasted trip; few AGMs are. This one provided a great opportunity to chat to some KAP people after the meeting – a really energised group of individuals whom I look forward to meeting up with again next year, now that I know where their offices are.
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