Rating the AGMs: FirstRand and Aspen 

The good news – if you happen to be a FirstRand shareholder – is that the FirstRand AGM was a much-improved affair this year. But the not-so-good news is that it wasn’t that much improved.  

There were a number of own goals – the sort that really shouldn’t be happening at a bank of FirstRand’s stature. 

The worst of these, particularly if you were the shareholder involved, was the struggle to access the meeting. Shareholder Anthony Walker had to track down the company secretary hours before the meeting to get an access link. This is a far-from-perfect situation as it might not always be possible to get hold of the company secretary so close to the AGM. 

Even more concerning was that this wasn’t the first time Walker had difficulties accessing the AGM – the same thing happened in 2021 and 2022. What’s unknown is how many other shareholders tried and then abandoned efforts to get into the meeting.  

The company secretary did tell the meeting she’d received nothing from other shareholders. What is unknown is whether others hadn’t simply given up trying to contact her. 

The board did seem more relaxed about answering questions this year. Recall last year that chair Johan Burger and his colleagues were particularly tetchy about the generally innocuous questions put to them. At one stage last year, Burger cut shareholder activist Chris Logan off – which is much easier to do when the shareholder is at the end of a phone line rather than sitting in front of you in an auditorium.  

Uncomfortable

Mind you, as this year’s meeting kicked off it did seem that none of the directors seemed particularly happy about engaging with shareholders; they looked a tad uncomfortable. It’s a bizarre situation – and disturbingly common. These are some of the most qualified individuals in the business community and, to prove it, they all get fabulously well paid. You’d think engaging with the odd shareholder would be a doddle.  

The boards of only a handful of companies seem to get this right. Check out Shoprite’s Wendy Lucas-Bull, who not only looks remarkably comfortable at AGMs but provides informative answers to questions. Also, Mike Bosman at Spar. 

Anyway, they did warm up a bit as the hour progressed. Chris Logan, there again this year, threatened to set things back a bit when he asked why none of the FirstRand founders were on the board. Logan referred to high-flying Capitec without mentioning co-founder Michiel le Roux, who remains a non-executive director of that company, several years after retiring. 

“Directive 4”, Burger barked back, mentioning something about independence and the King code.  

The fact is Directive 4/2018, issued by the Prudential Authority, states any director on a board for nine years or longer is not deemed independent. But while this lack of independence does limit the committees the director can sit on, it certainly doesn’t prevent them from sitting on the board and some committees. 

Consider Burger’s situation. He has worked at FirstRand since 1987. He was CFO and then CEO for two years to 2018 at which time he was appointed a non-executive director. In 2023 he was appointed independent non-executive chair. 

So, it’s hardly prudential regulations and governance codes that are stopping Laurie Dippenaar, GT Ferreira and Paul Harris from sitting on the FirstRand board. 

Paying up for performance

Perhaps the most chilling part of the AGM was the comment made by remuneration committee chair Louis von Zeuner in response to a question about CEO Mary Vilakazi’s R78.2m package. As Von Zeuner sees it, the remco didn’t see this as excessive but merely payment for performance. 

“It isn’t a banking comparison that applies, we know that movement of CEOs is boundaryless, it can go international, it can go into other industries. So, we need to be benchmarking locally, internationally and outside of the banking industry,” said Von Zeuner, prompting images of Tesla-style payouts.  

So, what did FirstRand score for this year’s meeting, which lasted 56 minutes? Well, it was an impressive 37% improvement on last year’s score. 

It gets the full 20 points for commendably providing shareholders with the ability to attend in person or virtually. And the full five points for ease of access for guests, which seems extremely unfair to Andrew Walker but that’s how the scoring goes – for now. 

For quality of video feed FirstRand scores 15 out of a potential 20; losing a few points because the camera focused too much on Burger instead of panning across the other board members and, more significantly, the shareholders in the auditorium. 

Shareholder questions gets 10 out of 10 as the bank impressively provided shareholders with three different ways to ask questions.  

But, for flow of questions the score is 15 out of 20 as processing the questions from the shareholder platform was a bit clunky and many of the answers were patchy. 

Once again, the minutes of previous meetings could not be found, so that’s zero out of five for a total of 62. In summary, much improved with loads more room for improvement. 

All sewn up

It was Currency’s first time attending an Aspen AGM, so there were no expectations, which is just as well.  

It was, to say the least, an unusual meeting, largely because chair Kuseni Dlamini read out a welcomingly brief synopsis of each resolution, and then immediately read the voting result of that resolution. This meant there was absolutely no time to ask questions relating to any of the resolutions.  

There must be a regulation somewhere being contravened. 

Of course, all that Dlamini has done is highlight what we all know, which is that the outcome of voting at AGMs is known ahead of the meeting in 99% of cases. This is largely down to the fact that institutions dominate voting, and they invariably vote early. 

Still, it’s nice to encourage the notion that answers might sway voting. This should be particularly relevant to a company in the sort of challenging circumstances Aspen currently finds itself in.  

Adding to the sense that the outcome of the meeting had been orchestrated a few days earlier was CFO Sean Capazorio’s response to the one investor who asked a question. “We did address a lot of that in our one-to-one meetings with shareholders” ahead of the AGM, he said. 

A difficult score

All of which makes it a little difficult to score Aspen’s 26-minute AGM, but here goes. Twenty out of 20 for holding an in-person and virtual meeting. 

Two out of five for ease of access for guests, as Currency had to request a link from the company secretary.  

For the quality of video feed Aspen gets just 12 out of 20 because the camera appeared to be fixed low down at one end of the long table; water bottles blocked much of the view. 

Ten out of 10 for enabling online and in-person questions. But just 10 out of 20 for the flow of discussion, given that shareholders were not provided with an opportunity to ask questions before voting on resolutions. And as Currency was unable to locate the minutes of last year’s AGM, Aspen gets zero out of 10 on this, which brings its total score to a reasonable 54. 

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