Member Proxy Voting Report

Transcription

1 Member Proxy Voting Report September Quarter, 2006 How we voted our Australian and international equities This report covers the 1 July 2006 to 30 September 2006 quarter, during which UniSuper voted on 764 corporate governance resolutions, put forward by companies in the S&P/ASX 200, FTSE 350 (UK), S&P 500 (US) and FTSE Eurofirst 300 Index. UniSuper had a total of 13 Australian and international equity managers who have segregated mandates. The Fund s Australian and international specialist proxy voting advisors provide how to vote recommendations to UniSuper and UniSuper s fund managers. All UniSuper Australian fund managers must vote FOR or AGAINST and cannot ABSTAIN unless there are conflicts of interest. Votes are lodged in accordance with the Australian Council of Superannuation Investors (ACSI) Corporate Governance Guidelines ( which UniSuper has adopted. UniSuper also takes into account specialist voting advice on corporate governance best practice in ex-australian markets from Pension Investment Research Consultants (PIRC), who vote on behalf of UniSuper s international fund managers. It is important to note that there are specific differences between Australian and international proxy voting in the US. These include:» Votes pertaining to individual Directors cannot be cast as AGAINST votes, but rather are recorded as WITHHOLD ;» UniSuper may use the ABSTAIN vote in accordance with PIRC s advice to UniSuper; and» Shareholder resolutions are lodged more frequently in the US. Summary of Australian Proxy Voting July 1 September 30, 2006 Number % S&P/ASX 200 (Australia) Number of corporate governance related resolutions Voted FOR in line with UniSuper recommendation (more than half of the total shares voted) Voted AGAINST in line with UniSuper recommendation (more than half of the total shares voted) 1 2 Total Instances where votes split FOR & AGAINST 5 8 Number of instances where the majority of votes lodged were contrary to UniSuper recommendations Please note that the above table does not sum to 100% because the dataset are not mutually exclusive. Summary of International Proxy Voting July 1 September 30, 2006 Number % Total number of corporate governance related resolutions 701 FTSE 350 (UK) Number of corporate governance related resolutions Voted For in line with UniSuper Voted Against in line with UniSuper Voted Abstain in line with UniSuper 34 9 Withdrawn 0 0 S & P 500 (US) Number of corporate governance related resolutions Voted For in line with UniSuper Voted Against in line with UniSuper 17 6 Voted Abstain in line with UniSuper 14 5 Vote Withhold in line with UniSuper FTSE Eurofirst 300 Number of corporate governance related resolutions Voted For in line with UniSuper Voted Against in line with UniSuper Voted Abstain in line with UniSuper 5 6 Non voting 6 8 Please note that the above table does not sum to 100% because the dataset are not mutually exclusive.

2 Overview of Australian Voting Voting in the S&P/ASX 200 (Australia) UniSuper voted on 63 corporate governance resolutions put forward by companies in the S&P/ASX 200. The highest number of votes AGAINST were in relation to company resolutions at the shareholder meetings of MetCash, James Hardie, Alesco Corporation and Australian Pharmaceuticals. The most frequent AGAINST votes lodged by UniSuper pertained to:» Remuneration Reports;» The approval of Share Acquisition Plans; and» The election of certain directors. The most frequent FOR votes lodged by UniSuper pertained to the election of directors. Overview of International Voting Voting in the FTSE 350 (UK) UniSuper voted on 359 corporate governance resolutions, put forward by companies in the FTSE 350 (UK). The highest number of votes AGAINST were in relation to company resolutions at the shareholder meetings of Gus Plc, British Airways Plc, Man Group Plc and Marks & Spencer Plc. The most frequent AGAINST votes lodged by UniSuper pertained to:» The approval of Executive Share Plans;» Remuneration Reports; and» Political donations. The most frequent FOR votes lodged by UniSuper pertained to the election of directors. Voting in the S&P 500 (US) UniSuper voted on 262 corporate governance resolutions, put forward by companies in the S&P 500 (US). The highest number of votes AGAINST were in relation to company resolutions at the shareholder meetings of AT&T and BellSouth and H&R Block. The most frequent AGAINST votes lodged by UniSuper pertained to:» The approval of Executive Equity Incentive Plans;» Performance hurdles of Long Term Incentive Plans; and» Ratification of the appointment of accounting and audit firms. The highest WITHHOLD votes lodged by UniSuper that pertained to election of certain Directors, were in BioMet Inc, BMC Software, Compuware Corp, Dell, FedEx and Nike, as they did not meet ACSI guidelines on independence and length of tenure of Directors. The most frequent FOR votes lodged on shareholder resolutions pertained to:» Simple majority vote for director elections;» Disclosure of executive severance payments; and» The separation of the role of Chairman from CEO. Voting in the FTSE Eurofirst 300 (Europe) UniSuper voted on 80 corporate governance resolutions, put forward by companies in the FTSE Eurofirst 300. The most frequent AGAINST votes recorded by UniSuper, pertained to:» Election of certain directors; and» Dilution of shareholder rights. The most frequent FOR votes recorded by UniSuper pertained to:» Election of certain directors; and» Ratification of independent auditors and accountants. 2

3 UniSuper s engagement with Australian companies Transurban AGM held on 23 October 2006» UniSuper engaged with Transurban leading up to the vote on shareholder resolutions for the Transurban Group (TCL) Annual General Meeting (AGM).» UniSuper did not support the re-election of Mr Laurence Cox as director of TCL, as Mr Cox is considered an affiliated director by UniSuper, given his executive directorship position at Macquarie Bank (MBL). This issue, as well as TCL s remuneration structure, had been the subject of correspondence between UniSuper s CEO and the MD of TCL over the latter half of last year.» The remuneration structure used by TCL improved relative to the prior year.» TCL proposed a corporate restructure which involved the destapling of one of the stapled entities, TL, to be replaced by a newly formed company Transurban International Limited (TIL). - Of concern to UniSuper, was that shareholders would only directly elect 25% of the Board directors of TIL. - UniSuper's discussions with TCL resulted in a concession to shareholders that TIL will now put one of the two offshore directors up for re-election next year and the other for re-election in the following year. Corporate governance in international companies News Corporation AGM held on 20 October 2006 (listed in Australia and the US)» At the July 2006 quarterly update to members regarding proxy voting, it was noted that UniSuper had settled the joint legal action against News Corporation regarding its Poison Pill Rights Plan.» At the 2006 News Corporation AGM a resolution was proposed amending the News Corporation Right s Plan. - If shareholders approved the proposal, the litigation against the company would be dismissed. On the other hand, an AGAINST vote if successful, could mean that News Corporation could go back to the courts and proceed to trial against the Plaintiffs. - On balance, with regard to the legal action undertaken by UniSuper, in which UniSuper secured shareholders the right to vote on poison pills for a period of 20 years, UniSuper voted FOR the proposal. - The Poison Pill Rights Plan was carried, with a 57% vote FOR the resolution» UniSuper voted WITHHOLD AUTHORITY FOR regarding directors Aznar, Lachlan, Murdoch, Perkins and Thornton because of concerns regarding their independence. 1» UniSuper voted ABSTAIN in connection with the reappointment of Ernst and Young as the company's auditors. Abstentions are typically lodged as a signal to the company, out of concern over the level of non-audit compared to audit fees of Ernst and Young. UniSuper working together with other Funds GIGN Letter Review of Vote on US Director Elections This quarter UniSuper participated in the Global Investment Governance Network (GIGN) as a signatory calling for corporate governance regulatory reform in the US.» In September 2006, the Securities and Exchange Commission (SEC) announced that it would hold a public hearing on whether to clarify their rule (Rule 14a-8(i)(8)), regarding shareholder voting on director elections.» In response to the invitation, the Global Investor Governance Network (GIGN) drafted a letter recommending that the SEC: - Apply the Rule so as to grant shareholders access to proxy resolutions relating to Director elections; and - Allow shareholders to vote on Board nominees, propose a nominee to the Board, and to call an extraordinary general meeting, so as to vote upon changes in Board composition.» On 13 October 2006, UniSuper s CEO co-signed the GIGN letter to the SEC. 1 It should be noted that under the US/Delaware system, votes on each Director proposed for re-election by the Board are either FOR or WITHHOLD AUTHORITY FOR on each candidate. Technically there are no AGAINST votes allowed on Director elections and the WITHHOLD AUTHORITY FOR vote is equivalent to an ABSTAIN vote under the Australian system. Disclaimer The information in this publication is of a general informative nature and is not intended to be financial advice. Before making financial or investment decisions, you should consult a licensed adviser. You should read this information in conjunction with other disclosure documents the Trustee has prepared for members. Every care has been taken with the information provided in this publication. However, because of the complex nature of superannuation and taxation law and the frequent changes occurring, UniSuper Management reserves the right to correct any error or omission. If there is any discrepancy between this publication and the Trust Deed and Regulations, the Trust Deed and Regulations will be the final authority. Information in this publication regarding investment returns, administration charges, and benefit structures is current as at the date of publication, but may change in future. Issued by UniSuper Management Pty Ltd, Australian Financial Services Licence Number UniSuper Level 37, 385 Bourke Street Melbourne Vic 3000 Trustee UniSuper Limited ABN RSE License RSE Registration No. L No. R Administrator UniSuper Management Pty Ltd ABN Australian Financial Services Licence No Contact information If you need more information: enquiry@unisuper.com.au call the UniSuper Helpline on visit our website at 3

4 Voting Meeting Company Resolution Ballot Issue Percentage Votes Cast Resolution passed Date Type "FOR" "AGAINST" Y/N 13/07/06 AGM CSR Ltd. 1 Accept Financial Statements and Statutory Reports for the Year Ended March 31, Adopt the Remuneration Report for the Year Ended March 31, (a) Elect Barry Jackson as Director 3(b) Elect John Story as Director 4 Amend the Constitution to Renew Proportional Takeover Provisions for a Further Three Years 18/07/06 AGM Rinker Group Ltd 1 Accept Financial Statements and Statutory Reports 2 Adopt Remuneration Report 3(a) Elect Walter Revell as Director 3(b) Elect Jack Thompson as Director 4 Approve the Increase in the Remuneration of Non-Executive Directors to A$1.70 Million 6 Amend Proportional Takeover Provision for a Further Three Years 18/07/06 AGM SP Ausnet 2(a) Elect Eric Gwee Teck Hai as Director 0% 100% Y 3 Approve KPMG as Auditors and Authorize Board to Fix Their Remuneration 2(b) Elect Jeremy Guy Ashcroft Davis as Director 2(c) Elect Antonio Mario (Tony) Iannello as Director 4 Adopt Remuneration Report for the Period Ended March 31, Approve Remuneration of Non-Executive Directors in the Amount of A$1 Million Per Year With Effect From April 1, /07/06 AGM Macquarie Bank Ltd 5 Elect SD Mayne as Director 83% 17% N 2 Approve Remuneration Report 3 Elect HK McCann as Director 4 Elect LG Cox as Director 6 Approve the Participation of AE Moss in the Macquarie Bank Employee Share Option Plan 7 Approve the Participation of MRG Johnson in the Macquarie Bank Employee Share Option Plan 8 Approve the Participation of LG Cox in the Macquarie Bank Employee Share Option Plan 9 Adopt New Constitution 28/07/06 EGM Singapore Telecommunications Ltd. 4 Approve Participation by the Relevant Person in the SingTel Performance Share Plan 9 Approve Issuance of Shares and Grant of Options Pursuant to the Singapore Telecom Share Option Scheme

5 Meeting Company Resolution Ballot Issue Percentage Votes Cast Resolution passed Date Type "FOR" "AGAINST" Y/N 1 Amend Articles of Association 2 Authorize Share Repurchase Program 3 Approve SingTel Performance Share Plan 1 Adopt Financial Statements and Directors and Auditors Reports for the Financial Year Ended Mar. 31, Reelect Graham John Bradley as Director 4 Reelect Chumpol NaLamlieng as Director 5 Reelect Lee Hsien Yang as Director 6 Approve Directors Fees of SGD 1.5 Million for the Financial Year Ended Mar. 31, 2006 (2005: SGD 1.2 Million) 0% 100% Y 7 Appoint Deloitte & Touche as Auditors and Authorize Board to Fix Their Remuneration 8 Approve Issuance of Shares without Preemptive Rights 10 Approve Issuance of Shares and Grant of Options Pursuant to the SingTel Performance Share Plan 31/08/06 AGM Metcash Limited 2(a) Elect Michael Jablonski as Director 2(b) Elect Lou Jardin as Director 3 Approve Remuneration Report for the year ended April 30, (c) Elect Richard Longes as Director 2(d) Elect Bruce Hogan, AM as Director 25/09/06 AGM James Hardie Industries NV 4 Approve Maximum Remuneration of Members of Supervisory Board 69% 31% Y 6.b Approve Participation in the LTIP and Issue of Options to L. Gries 69% 31% Y 6.c Approve Participation in the LTIP and Issue of Options to R.L. Chenu 69% 31% Y 6.d Approve Participation in the LTIP and Issue of Options to B.P. Butterfield 69% 31% Y 5.a Approve and Issue Shares under Supervisory Board Share Plan (SBSP) and the Issue of Shares under it 5.b Approve Participation in SBSP by M Hellicar 5.c Approve Participation in SBSP by J.D. Barr 5.d Approve Participation in SBSP by M.R. Brown 5.e Approve Participation in SBSP by M.J. Gillfillan 5.f Approve Participation in SBSP by J.R.H. Loudon 5.g Approve Participation in SBSP by D.G. McGauchie 6.a Approve Long Term Incentive Plan 2006 (LTIP) and the Issue of Securities Under It 5

6 Meeting Company Resolution Ballot Issue Percentage Votes Cast Resolution passed Date Type "FOR" "AGAINST" Y/N 7 Authorize Repurchase of Up to Ten Percent of Issued Share Capital 8 Approve Renewal of Article 49 Takeover Provisions 1 Approve Financial Statements and Statutory Reports for Year Ending on March 31, Approve Remuneration Report for Year Ending on March 31, a Elect M Hellicar to Supervisory and Joint Boards 3.b Elect M.J. Gillfillan to Supervisory and Joint Boards 3.c Elect D.J. McGauchie to Supervisory and Joint Boards 25/09/06 AGM Kimberley Diamond Company NL 3 Ratify Past Issuance of 10 Million Ordinary Fully Paid Shares at A$1.25 Each, 76,499 Ordinary Fully Paid Shares at A$0.35 Each, 5 Million Unlisted Options Exercisable at A$1.80 Each, and 2.4 Million Unlisted Options Exercisable at A$1.75 Each 6