Monday, 26 November 2012

GetUp's poker machine proposal for Woolworths fails

Over the last few months I have been following the Woolworths versus GetUp! saga whereby GetUp! was trying to get Woolworth's to introduce legislation through an EGM whereby Woolworths would be seriously curtailed in the way that it was allowed to operate it's poker machines.  After thinking through the implications and issues quite carefully I was against the resolution for various reasons which I have outlined in previous posts.

Last Thursday Woolworth's put the issue to a vote at an Extraordinary General Meeting (which also doubled up with their Annual General Meeting) and the proposal failed.  This is not surprising however if you look at the statistics and breakdowns in the vote there are some interesting features.

The proposal was resoundingly defeated by submitted proxies well before the actual vote

If you look at slide 14 of the Woolworths EGM presentation you can see what the status of the vote was before the open votes on the day were cast.

  • 2.47% of the shares voted for the proposal
  • 95.41% of the shares voted against the proposal
  • 3.14% were open to be voted at the general meeting
If you look at the final results (see the final page of this document) you can see that most of the shares voted at the meeting were actually against the proposal.  The final count of shareholders voting for and against the GetUp! EGM resolution was:
  • For: 2.53%
  • Against: 97.47%
The resounding defeat means that either retail shareholders didn't turn out OR they were against the proposal

There is often the perception by participants in the market place that institutions are somehow more 'ruthless' than individual shareholders.  GetUp! made a big play about having motivated the retail shareholder base at Woolworths to vote for the proposal.

Retail shareholders make up approximately 30% of WOW's shareholder base (I will tell you how to calculate this in a later post).  As only ~2.5% of shareholders voted for the EGM proposal this means that retail shareholders either voted against the proposal or they simply did not turn up.  I have posted before about the apathy of retail shareholders when it comes to voting.  

Unfortunately it is hard to see which one of these that it is however it is hard to think of a motion that they are more likely to understand or be encouraged to vote for.

It is unclear whether any institutions voted for the proposal

GetUp! tried to get their members to send letters to their superannuation funds to encourage them to vote for the proposal.  Indeed they even had a standard form letter on their website that you could send to them.  However based on the vote count it does not look like there are any institutions that voted for the proposal (though I could be wrong).

I find this actually very comforting - I like to think that my superannuation fund would vote in a way which protected all of their security holders and not just the ones who are particularly vocal.

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