Shareholder returns

Company returns to shareholders are not enough.  For example, say a company has a half a billion shares on issue: for every $5 million it spends on increasing remuneration, that's one cent removed from the dividend to shareholders.  Currently we have boards and executives enjoying huge remuneration increases that massively outstrip shareholders' returns.  It has to stop.  You can make it stop.  You have a superannuation fund: it almost certainly owns shares in large companies.  Write to your super fund and demand that they vote against these huge increases.  Here's the letter I wrote to mine - feel free to cut and paste so you can send it to yours.  It will probably be far more effective and efficient than camping in the city square with some smelly hippies!!

Complaints Officer

HESTA Super Fund

PO Box 600

Carlton South, Vic 3053

Dear Sir/Madam,

I write to you upon receipt of my annual report.  Thanks you for actually making money this year.  You managed to make about 10% which is pretty good.  However when I look at the segmented earnings I see that the return on share investments was not as good.

It is for this reason that I must demand that you vote against company remuneration reports for any companies I have an interest in who propose to increase directors and/or executive remuneration beyond any increase in shareholder returns from profits.

It is inexcusable for these already well paid people to continue to expect that shareholders stand idly by whilst company profits are used solely to line their pockets.  Super Fund managers must start to take action to protect the long term interests of members.  Shareholders should not be expected to have capital gains be their only avenue to profit from share investing.  This seems to have become commonplace over the past decade and it must cease.

Given recent articles in daily newspapers and other media, I believe that I should expect to see some board spills over the next 12 months as fund managers exercise their fiduciary duty to their members and vote against wage rises and excessive remuneration packages at company AGMs.

Please do not disregard this notice.

Sincerely,

Graham Bushnell