Iress Limited (IRE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Roger Sharp, Chair of Iress Limited. It's 11:30, and I declare this Annual General Meeting open. Before we begin, I'd like to pay my respects to the traditional owners of the land on which we meet, the Wurundjeri people of the Eastern Kulin Nation. I noticed Andrew glancing over to make sure I got that right. I'd also like to pay my respects to their elders past and present and aboriginal elders of any other communities who may be here today. As you know, today's meeting has been convened as a hybrid meeting. I thank you all for the time you've taken to join our meeting, either online or via the Computershare platform, or it be here with us at KWM's offices. And might I say how nice it is to meet with other humans in person after the last couple of years we've had. For those of you attending in person, a quick word about emergency procedures, in the event that we should have an emergency. If you should have a bathroom emergency, you need to go out that way and straight ahead and you'll find bathrooms. However, if we do need to evacuate, there are evacuation points on the south and on the north. So either turn right or left as you leave the room, and a warden will direct you to the appropriate and safest point. In a moment, I'll say a few words concerning how I propose to run the meeting and, of course, the procedures for questions and for voting. But first, I'd like to make some important introductions. We're fortunate today to have all our Board members here, including Niki Beattie, who, alphabetically, is first and has also come all the way from the U.K. So welcome, Niki. John Cameron, we'll talk about John in a minute. This is actually his last AGM. We had our last Board meeting yesterday. Julie Fahey, who is Chair of our People & Performance Committee. Trudy Vonhoff, who is Chair of our Audit and Risk Committee. And of course, Andrew Walsh, our CEO and Managing Director. Also in attendance today are Peter Ferguson, our Chief Legal Officer and Company Secretary; John Harris, our Chief Financial Officer. And I'd also like to acknowledge representatives from our legal and accounting advisers, including Joe Muraca from King & Wood Mallesons; and Tom Imbesi and Stephen Roche from Deloitte. Tom, Stephen. Our auditors will be available for any questions when we consider the financials, which will be the first item of business. So in today's meeting, we will consider the following matters: the presentation of the 2021 financial statements and reports; the reelection of Michael Dwyer as Director; the advisory resolution to adopt the remuneration report; the granting of equity to the CEO, this item having 2 parts, equity rights and performance rights. The first of these matters is not for voting, but it's for tabling and discussion. The resolution regarding the reelection of directors is an ordinary resolution, as are the resolutions on the remuneration report and the granting of equity to the CEO. Now I am advised that due notice of the meeting has been given, in accordance with the requirements of the Companies Act and the ASX Listing Rules, and that we have a quorum present. I'll take the notice of meeting as read. A word about proxies. Proxies, as provided in the notice of meeting, were to be lodged 48 hours before the meeting. In relation to the proxies appointing me as Chair -- as proxy, where directed, proxies by the proxy holder were directed -- I'm required to vote those proxies as directed. In relation to undirected proxies, I will vote those proxies in favor of each resolution, subject, of course, to any voting restrictions that apply. Those attending in person and online will have the opportunity to ask questions. Now I am reliably informed that people tuning in over the web hear everything we say 30 seconds after we say it. So it's going to be important to allow for our participants who are online. So we will try and question people in the room ahead of taking questions online. So there'll be an opportunity to ask questions on all items of business. And as I say, I'll take them from those present in the room first, followed by online. For those attending in person, if you wish to ask a question, I'll ask you make your way to a microphone, state your name, who you represent prior to asking your question. Now we're using a microphone to ensure both audio and video quality, particularly for our shareholders who are turning in over the web. If you're online, you can submit your questions at any time. To ask a question, there's a Q&A icon at the top of the screen on the platform. An image of this icon is now being displayed on the slide appearing onscreen. Select the resolution that your question relates to from the drop-down list. Type your questions into the text box. And once you finish typing, please hit the send button. To ask a verbal question, please follow the instructions written below the broadcast. Please note that while you can submit questions at any time from now, they will not be addressed until the relevant time in the meeting. Please also note that your questions will be moderated or, if we receive multiple questions on one topic, we may well consolidate them. I'll just move now to the process for voting. Each resolution is an ordinary resolution and will be passed by a simple majority today. The voting restrictions for all resolutions are included in the voting exclusions sections of the explanatory notes in the notice of meeting. Voting today will be held by way of a poll on all resolutions. I appoint Michael Hutchison from our share registry, Computershare Investor Services, as the returning officer. Those entitled to vote are all shareholders, representatives and attorneys of shareholders and proxy holders, who, if attending in person, hold blue admission cards. To provide you with enough time to vote, I will shortly open the poll for voting for all resolutions. Voting will remain open until I declare the poll closed at the end of the meeting. As we go through each resolution, the proxy results received in advance of the meeting will be displayed on the screen. I note that the 4 numbers displayed for each item will include proxies received and available to be voted by me as Chair of the meeting. I'll now outline the instructions for conducting the poll. Firstly, for those attending in person at the venue and then for those attending the meeting online, are you with me? There's a lot of instruction here. Voting in person, okay. If there's anyone present here at the KWM offices who believes they're entitled to vote but didn't register to vote on arrival, could you please make your way to the registration desk, register and obtain your admission card, which contains your voting paper. Those who have already registered and have received a blue admission card, on the reverse of that card is your voting paper, which details the resolutions being put to this poll. Relevant instructions are also printed on the reverse of the card. Now let's move to the procedures for filing the voting paper. Proxy holders have attached their admission card or have attached to their admission card a summary of proxy votes which details the voting instructions, if any, for business items on the appointed documents in your favor. By completing the voting paper, when instructed to vote in a particular manner, you are deemed to have voted in accordance with those instructions. In respect of any open votes a proxy holder may be entitled to cast, you need to mark a box beside the resolution to indicate how you intend to cast your open votes. Shareholders and representatives and attorneys of shareholders also need to mark a box beside the resolution to indicate how you wish to cast your votes. Please ensure that you print your name, where indicated, and sign the voting paper. When you finish filling in your voting paper, please lodge it in a ballot box to ensure that your votes are counted. Now if you're voting online, if you are eligible to vote at this meeting, the vote icon will appear in your browser. An image of this icon is now being displayed on the slide appearing onscreen. Once voting opens, press the vote icon at the top of the screen and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. There's no need to hit a submit or enter button as the vote is automatically recorded. You'll receive a vote confirmation notification on your screen, but you can change your vote up until I declare the voting closed. If you experience any difficulty submitting a question or voting online, please consult the online user guide referenced on Page 4 of the notice of meeting for further assistance. I now declare voting open on all resolutions. I'll give you a warning before I close the voting at the end of the meeting. Subject to any applicable voting restrictions, the Board recommends that shareholders vote in favor of each resolution. This completes the formalities. I'll speak for a few minutes now on the year that's been. And then I'll hand to Andrew for his CEO address, and then we'll move to the formal business of the meeting. So it has been, I think, a rather eventful year since I took over from my predecessor, Tony D'Aloisio, as Chair this time last year. No one could have foreseen that the 12 months would include a takeover offer, the launch of Iress' new strategy and targets, a pandemic that just wouldn't end, rampant inflation, interest rates moving up, a war in Eastern Europe. It's quite a list. But notwithstanding the series of events, I feel really impressed at our company's ability to get stuff done, its agility, its capacity to innovate and, when required, which has been a lot, its people's good humor. And under quite a lot of stress during the year, it's really great to see everyone working constructively and smiling and laughing and working out how to do things together. And not to mention the resilience of our products and a very loyal customer base, this is a very good place to be in turbulent times. When I joined last year, I had the opportunity to speak to quite a large number of shareholders, the first of many times during the year. It's clear to me there is a healthy respect for Iress and for its leadership, accompanied by a strong desire to see better financial performance. The common themes across our conversations with shareholders where the desire for a higher sales cadence and, in particular, for improved EPS performance and capital management. We listened to you. Last year, the Iress Board and management team came together many times. I -- preparing for this meeting, I looked into the annual report just to check how many times we met as a Board, and it was about 20 from memory, which is slightly more than you might expect. So we came together a lot in an extensive review of the company's product, its markets, its financial returns, its tech profile. The resulting strategy update, which was announced to the market on 29 July last year, included measures to accelerate growth and returns to shareholders, with a new target to more than double net profit after tax and earnings per share by 2025. A key component of this strategy is the delivery of a single product platform, driving our intellectual property and experience into multiple propositions, accelerating product development and delivery and creating a seamless experience for our clients. The plan, which requires an investment of over $30 million over several years, will scale across geographic boundaries and deliver profitable growth and improved returns for shareholders. Of course, then we had the proposed takeover offer by EQT. You'll be aware that in July 2021, I just received the first of a number of confidential, unsolicited, nonbinding offers from EQT Funds Management, offers to acquire all of Iress' shares. Following careful consideration and a number of rounds with EQT in order to determine whether value could be maximized for shareholders through this process, in September, it was announced -- well, we recommended an offer. We clearly have a view on the value of this company under multiple scenarios. We felt we had an obligation to engage with EQT to see if value can be maximized. But as you're aware, in September, it was announced that discussions had concluded with the parties unable to agree a transaction. Iress has obviously since continued with its own plans to accelerate growth and returns to shareholders. And I must say, it's good to see that journey now underway. There were many distractions last year, but now we have, I think, a clarity of purpose and a very unified view on what we need to do. I'll talk briefly about financial performance during the year. In 2021, we delivered a good year and a result of, as I said, many distractions and more than a few events beyond our control. If we look at our financial results, our reported segment profit for the year was $166.2 million, up 9% from 2020. While NPAT grew 25% to $73.8 million, reported EPS grew 20% to $0.388 per share. But at the same time, return on invested capital increased 130 basis points to 10.5%. Clearly, we've got some way to go to meet our FY '25 targets, which, obviously, now include a contribution from our Mortgages business in the U.K. The target for FY '25 is $135 million in NPAT, earnings of $0.67 per share and ROIC, return on invested capital, of 18%. Some way to go, but we are on the journey. The outcomes of these processes are never linear, but we have the team, we have the targets, and we have the tool to get this done. And most importantly, a new incentive structure that aligns our team, the actions that our team is taking with shareholders. We've also revised our approach to capital management this year based on the fundamental premise that shares are precious. Now that a key stepping stone towards improving our EPS performance is to restrict new equity issuance. We have suspended our dividend reinvestment plan. We now attempt to buy shares on market, where it's accretive to meet awards to employees, and we're partway through conducting a $100 million share buyback. These moves all symbolize an acute focus on improving returns to our shareholders. On 11 June last year, we announced that as part of our capital management plan that we were considering options for the sale of our U.K. Mortgages software business. Of course, at that time, we didn't foresee that technology valuations would fall by half, inflation would where it's hit as it has or, indeed, that war would break out in Europe. Having confirmed our focused approach to both EPS and capital management, it would have been inconsistent to sell a high-quality asset when valuations and markets were falling. So after careful deliberation, we announced on the 12th of April this year that Iress has decided to retain the business and reap the benefits of a strong forward pipeline. Now to provide both the Mortgages team and our clients with certainty, as much certainty as possible, we announced our intention to retain this business indefinitely. I'll move on to the incentive structure we've launched. Obviously, we're going to be voting on that a little later. The new strategy we launched on 29 July is bold and it's ambitious. And the remuneration plan in place at that time was simply out of step with our new objectives. It was calibrated to a different set of circumstances not aligned to the current strategy, so we had to put our thinking caps on. To that end, in the recent months, your Board has spent week upon week consulting with shareholders, with proxy advisers, with consultants and, of course, with our management team to implement a new incentive structure. As I mentioned, there will be an opportunity to discuss this in more detail during the meeting. But in summary, it's -- we feel an innovative plan that offers our team more reward for achieving better results. It also means downside if we don't perform, and it's very worthwhile keeping that in mind. This plan has been supported by 3 of the 4 major proxy advisers working in Australia and, as you'll see from the poll that we're going to hold, enjoys significant shareholder support. There also -- there has also been some resistance from an important proxy adviser, ISS, and I think it's worth saying a minority of shareholders have expressed their concern. I think, however, when you see the voting, you will note that a significant majority of shareholders in Iress support the new strategy. On behalf of the Board, I'd like to confirm our resolute support for this new structure. It really is the missing piece in the jigsaw puzzle that we need in order to execute against our plan. To shareholders, you asked for improved financial performance, and we listened. When we consulted you on a new remuneration plan, you gave us feedback, and we adjusted. Our PPC Chair, Julie Fahey, and I are looking forward to your voting support on this important matter as we move through the formal business. A quick note on dividends and balance sheet. In March 2022, we paid a final dividend of $0.30 per share, franked to 15%, bringing the full year 2021 dividend to $0.46 per share, franked to 38% and at a 30% corporate tax rate. Iress continues to maintain a conservative balance sheet with a leverage ratio of 1.4x segment profit. A few words on ESG, then on board structure before I hand over to Andrew. Iress is making really good progress on its ESG journey. In 2021, we appointed Amarjot Bagga as Head of Social Impact and of the Iress Foundation to continue building our impact. This involves the development of a 2025 environmental and social impact strategy, following a process of comprehensive stakeholder interviews, analysis of our own ESG processes and a review of external ESG best practice and methodologies globally. In 2021, we were recognized by the Australian Council of Superannuation Investors, or ACSI, in their assessment of ESG reporting by ASX 200 companies. Iress is one of just 34 ASX 200 companies to achieve a detailed rating, recognizing our commitment to continuous improvement. In 2022, we look forward to continuing our ESG journey through our commitment to set Science-Based Targets for emissions reduction and having a meaningful impact through Iress Foundation initiatives. I talk to Board structure because, as I mentioned before, John Cameron retires from the Board at today's meeting. And on behalf of the whole company, I'd like to thank John for 12 years of insights, commitment and service. In my first year as Chair, I've had John to offer a thoughtful and innovative voice around the table, who always spurs thinking sometimes from a different perspective. And it's that sort of diversity of thinking that's very useful around the table. So John, thank you again. A search is underway to replace John. We've got some candidates that we're interviewing at present, and we would hope to make a new appointment in the next few weeks. With a refreshed Board and new members of the management team leading product and sales and the continued client focus from our people, Iress is in a strong position, and the company is making good progress. Before handing over to Andrew for his comments, I would like to thank our shareholders for staying the course. I'd like to thank the broader Iress team for a great year of difficult conditions. And I would particularly like to thank Andrew and our management team for their extraordinary efforts and, of course, my fellow Board members for their initiative, work ethic, valuable counsel and often late-night phone calls. Andrew, over to you.

Thanks, Roger. And thank you for the support and guidance from you and also the whole of the Board over what's been an eventful year or years. Also thank John Cameron, specifically his long service to Iress. And the expertise and experience that you have brought to the Board, John, and the mark that you've left on Iress, again, much appreciated, and I wish you best for your career post Iress. Today, I'll cover key focus areas and operational progress, including more detail on financials. As announced to the market in July last year, we set out a bold set of goals to accelerate growth, to build upon unique foundations in financial technology and the market positions of Iress today. This will leverage our capability and the assets that we bring. By doing this, we're confident in the benefits that we'll achieve for clients, users, our people and, importantly, shareholder returns. Our strategy to evolve our product and technology builds upon strong, successful and leading technology businesses today. As I said at the time, we are not building a new dream, we're accelerating the one that we are already executing upon. In 2021, we began making progress towards this future operating model on strong cloud foundations. At the center of our strategic acceleration is the transition to a single product and technology platform, which will enable us to increase the speed by which we can create and deliver product propositions to our clients at scale, while solving the convergence of functionality and capability that's occurring with international services and our client base, both today and into the future. In October last year, we announced Emily Chen as Head of Technology Platform. Over the past 5 years, Emily has led Iress' Wealth Management Product team. During that time, she has steered many initiatives, laying foundation and groundwork for our single product and technology platform. These learnings are now being used to accelerate our activity in transitioning to platform-based operations, with progress already being made on delivering a cloud-first AMS solution in 2021, and strong progress made on bringing together other components of the platform-based investment infrastructure solution. As Roger mentioned, Iress has proven itself to be resilient and adaptive during various phases of the pandemic. I'm proud of how our team of more than 2,000 people has continued to prioritize delivering a high-quality experience to clients and users around the world during this difficult challenge -- challenging time. We continue to emphasize well-being and mental health. Attracting and retaining top talent continues to be a focus for Iress. In 2021, we announced the introduction of the Long Weekend to recharge batteries and restore perspective for all people at Iress. This has been enthusiastically received and bolsters a robust set of strategies supporting our ability to be successful in competitive markets. Next week, we'll launch a dedicated employer campaign targeting technology talent to further increase awareness of Iress as a career destination of choice. Adding to Roger's comments on our financial results in 2021. We delivered a strong set of results for 2021, and segment profit and net profit in line with earnings guidance. Recurring revenue, which underpins our group, continues to contribute over 90% of total revenue. We had strong revenue growth, up 10% in 2021 on a reported basis. This is largely being driven by the full period impact of OneVue, the acquisition we made in the prior year, growth in Australia, Mortgages and North America. We've made solid progress on all of our key strategic growth areas. In Superannuation, we've seen good momentum in our automated administration solution, with Guild Super going live and ESS Super live in early 2022. These stand out in the market as strong use cases for further technology-led transformation of superannuation fund operations, generating demand and leading to advanced discussions with several new prospects. We've successfully integrated Xplan and OneVue and placed live managed funds and equity trades in the user pilot, demonstrating our execution progress in building a fully integrated, highly efficient new offer. A commercial launch is planned for 2022. Finally, in the U.K., we saw strong growth in Private Wealth and Trading. This was offset by a reduction in nonrecurring revenue in Retail Wealth due to significant nonrecurring projects in the previous year. Initiatives are underway to rejuvenate growth. Our Mortgage business is performing well, with 2 more projects completed in the year and a strong and growing set of pipeline opportunities driven by lenders, demanding greater scale, efficiency and automation. As announced last month, Iress has ceased its plans to divest this business. After a thorough and well-considered process, we've concluded that the best outcome for shareholders, clients and people is for Iress to continue to invest in it and create the right environment to execute on its strategic growth potential. We've reaffirmed our outlook for 2022. With the retention of the Mortgages business, we expect to deliver within the range of 7% to 10% growth in segment profit, growth in underlying NPAT of 25% to 37% and underlying EPS of $0.40 per share to $0.44 per share on a constant currency basis. Thanks again to Roger and the Board. Thank you to our leaders at Iress and everyone at Iress, to our shareholders for your continued support.

Thank you, Andrew. As I noted earlier, there are 4 items of business before the meeting: firstly, the presentation of the 2021 financial results; secondly, the reelection of Michael Dwyer; third, the advisory resolution to adopt the remuneration report; and fourth, the granting of equity to the CEO. The proxies received for each resolution are being shown on the screen now. I'll move to the presentation of the 2021 financial statements and reports. The first item reads, to receive and consider the full financial report for the year ended 31 December 2021, together with the consolidated accounts of the company's controlled entities in accordance with the Corporations Act 2001 and associated directors' and auditor's reports. So this is not a voting item, but we would be pleased to receive questions and comments. The question and comment function online is open, so please raise any matters you would like to. I'd also note that our external auditor, Tom Imbesi, who is available to answer any questions on the conduct of the audit, the auditor's report, the company's accounting policy and the independence of the auditor. Again, please raise any matters you believe require attention. No written questions were received in advance of the AGM. I would like to note at this point, Tom, you're expecting us, I'm sure. Tom has been our audit partner for many years and retires at today's AGM. And on behalf of the Board and management, I'd like to thank him for his service. And of course, to welcome Stephen Roche, our new audit partner. So I'll first take questions from those shareholders who are present today. And if I could remind you to move to the microphone, please, and state whom you represent. I think that's your cue, Eric.

Good morning -- sorry, is that okay? Good morning, Mr. Chairman. My name is Eric Pascoe, I'm a proxy holder representing the Australian Shareholders Association, and we have 178,000 proxy votes. John, can I start by thanking you on behalf of shareholders for your contribution, and we're sad to see you go. So all the best for the future and well done. Mr. Chairman, for some years, Iress has been viewed by many as a potential star performer on the ASX. However, for some years now, the share price has been range-bound and dividends have been stable, not increasing. You've been chair now for 12 months, what do you think is needed to make Iress an ASX outperformer and is as your own?

Well, Eric, thank you. It's nice to see you. And Norm as well, it's good to see you. Well, I think we -- 29 July last year was when we released our new strategy, as you know. And look, I must say it is just great to see the firm, the company unified in the pursuit of building our new platform, which will make us much more scalable and enable us to achieve a set of new financial targets that are quite a bit more aggressive than what the market was previously expecting. And I think that strategy drives everything. Along with, if you consider the comments in my chair address on capital management, sales cadence, we've really tried to respond to what our shareholders have told us. Now is that going to make us a top-performing stock? Well, you need a crystal ball, obviously, Eric, to know these things. It depends on a range of factors. But as I mentioned, we have considerable cadence within the business, building towards our objectives. And it feels like a very good place to be in turbulent times. I hope that answers your question. Are there any other questions, ladies and gentlemen, from the floor? Norm?

Norm West, a shareholder. I'd just like to welcome Ms. Beattie here. Every other time I looked at her, she's been suffering out in London. So I'm delighted to see you here in the flesh. And I know I'm not supposed to say anything about John, but I have to, because he's the last of the long-term directors. And I'll speak on behalf of the early years, thank you very much and wish you all the best. Two comments, Mr. Chairman -- well, 2 questions. Do you -- and it's probably going to go to Andrew. Are there any areas where Iress' possibilities of expanding into a different business -- I don't want to know what the business is, that will be doing away confidences. But are you looking at future growth from different areas or a combination? Or do you believe you should be staying exactly where you are and go for efficiencies, et cetera?

I don't think that the way that we think about growth is staying exactly where you are. The world is moving fast to faster -- be fixed in that view. We do have a strategy that's heavily focused on the businesses that we have and growing them, particularly in terms of profit. But that is not an exclusion of other opportunities, be they organic or inorganic. But our focus is certainly on the strategy that we set out in July last year.

Did you have a second question?

I don't want to tread on somebody's toes. The current instability in the world and the world markets, the Chairman certainly gave that a run, and I think everybody is aware of it. Iress seems to be very strong in particular markets. But in this situation, particularly with people be aware of China, it's not really a stable market. Is Iress looking to expand its current business into other countries to give you the diversity? And I'm particularly focusing on Asia and the very close company -- or countries to Australia, India and Indonesia.

Andrew?

We have no current plans to expand operations into new countries specifically. We do have some businesses that do operate on an international basis and are not confined to where our operational footprint maybe. An example of that is international market data that we supply to market participants, wherever they may exist, but no specific plans to expand into India or Indonesia.

Thank you for those questions. Any further questions from the room? If not, Peter, you've been monitoring online questions. Do we have anything online?

No, Roger, we don't have any questions on this item.

All right. Thank you. In that case, we will move to the resolutions to be voted on as outlined in the notice of meeting. Resolution 1 is that Mr. Michael Dwyer AM be reelected as a Director of the company. It's before you now. Michael will say a few words in a moment. But by way of background, he has more than 35 years' experience in superannuation and investment, including 14 years as CEO of First State Super, which is now called Aware Super. He was appointed the Chair of TCorp, which is the New South Wales Treasury Corporation on the 31st of August 2020. On the first of December 2020, he was appointed Chair of -- or Director of Bennelong Funds Management Group, was appointed Chair on the first of July last year. Michael has been a Director since the first of February 2020. He retires as a Director in accordance with Rule 10.3 of the constitution. And being eligible, offers himself for reelection. I'd now like to ask Michael to provide the meeting with a few comments in respect to his background and current commitments outside Iress. Michael, I think this is the time when you're seen for your supper.

Thank you. Well, good morning, and welcome. I will say just a few words about me, which is somewhat immodest of me, but I will, nonetheless. As the Chair has said, I've been a Director of Iress Limited since the first of February 2020, serving on both the People & Performance Committee and the Audit & Risk Committee. I've had many years' experience in superannuation in the financial services sector. I currently sit on the Australian Securities Commission consultative panel. I'm also, in addition to the roles the Chair's outlined, I'm also Chair of Australian for UNHCR, the UN Refugee Agency, which, in light of world events, is keeping me busy outside of Iress. I should say, as a director, I'm certainly pleased to see that Iress continues to make good progress in executing our growth strategies, including providing Australian superannuation funds with a highly efficient, outsourced administration solution. This solution delivers superior member experience, lowering risk and providing cost certainty to our super funds and their clients. I'm confident in the Iress business strategy, and I look forward to taking advantage of the exciting opportunities ahead of us to accelerate growth and transform the industry that we serve. Thank you.

Thank you, Michael. Both Michael and I are available to take any questions or address the comments you may have. Are there any questions from shareholders and proxy holders who are here in person, please? No? Peter, anything online, please?

Yes, Roger, there is a question I have on line. It is from Mr. Stephen Mayne. The question is this, in 2019, Treasury Wine Estates voluntarily moved to annual elections for directors in line with best practice that occurs in both the U.S...

Can you speak up, please?

Thanks. I'll start again. Is that better?

Yes, sir.

All right. Thank you, Tom. So the question is from Stephen Mayne. In 2019, Treasury Wine Estates voluntarily moved to annual elections for directors in line with best practice that occurs in both the U.S. and the U.K. Dual-listed companies like NewsCorp and Rio Tinto all do this due to the laws in the U.S. and the U.K., and BHP has pledged to continue doing it even after its U.K. dual listing ended last year. Can the Chair comment on whether our company will follow this with respect to this TWE lead? Actually, I'm not sure what that acronym means. Treasury Wine Estates, thank you. And move to annual elections of directors at the 2023 AGM, particularly given that we have a significant presence in the U.K. market?

Well, thank you for the question, Stephen. I would say that one of the more obvious comments is that we're neither dual listed nor as large as TWE or Rio or BHP or News, which are many, many multiples of our size. I am happy to take it to the Board and talk about it at our next Board meeting. I would say that if you look at our Board today, we had 3 retirements last year. We've got one now, and we are recruiting a new director. I think my personal bias is towards stability. We've just got our Board together and functioning really well. We've got someone new coming on board. In that context, we're happy to consider it. But as at today, there is no intention to move to annual voting on directorships. Any other questions, Peter?

No, Roger.

Thank you. The proxies received for resolution 1 are shown on the screen behind me. I won't slavishly read them out. Please, could you now vote, both online and in person, either for, against or abstain for resolution 1? I will pause for 30 seconds to allow people to do this. A reminder that voting is open on all resolutions and will remain open until I declare it closed. So another 25 seconds or so. [Voting]

Right. We'll now move to resolution 2, which is that the remuneration report, which is contained in the directors' report for the year ended 31 December 2021, be adopted. It's before you now. This is an advisory resolution to adopt the remuneration report. The remuneration report forms part of the directors' report, which is included in the company's annual report for the year to 31 December 2021. The report explains the company's remuneration policy as well as its relationship with and link to the company's performance. It contains the remuneration details of the directors and other key management personnel of the company. And it explains the incentive arrangements in place for the key management personnel within the business. As the shareholder vote on this resolution is advisory only, the outcome of the vote is not binding on the Board. However, if the company receives votes of 25% or more against the report at 2 successive AGMs, a resolution to call a spill meeting must be put to shareholders at the second AGM. All of the relevant information concerning remuneration is contained in the remuneration report in the 2021 annual report. Julie Fahey, as Chair of the People & Performance Committee, and I are available to answer questions. So as with resolution 1, let's start with questions from shareholders and proxy holders attending the meeting. Eric?

Mr. Chairman, shareholders applaud Iress' new stated corporate goals. We agree with the signing -- sorry, the aligning, I should say, I haven't got my glasses on, aligning of executive pays to those new goals. And we even agreed with the hurdles, thinking they're targeted and appropriate. So everything's going swimmingly, except we can't support the proposed performance rights just because of the sheer quantum of the offer potentially blowing out executive salaries. And I think, Mr. Chairman, shareholders are looking to the Board to lead the containment of costs at Iress, and this is an example of heading in the wrong direction of blowing costs out.

Well, thanks, Eric. I would lead by saying that the performance rights are a performance-related payment, and the reward has only triggered it. First, we produce an absolute shareholder return of 10% per annum. And then 3 consecutive things are achieved: building the platform, migrating existing clients on to it, migrating new clients onto it, and then we achieve our return on invested capital and EPS targets. So there are actually a lot of hurdles to achieve. And all things being equal, if we were in the market we're in today, we doubled earnings, doubled EPS by FY '25, we'll double the value of the company. And if you think about shareholder alignment, we're going to add $2 billion to $2.5 billion of value to the company. About 4% of that would be paid to employees, some of that to the CEO. I think having listened to shareholders many, many times this year, having heard of consistent requests for improved performance, it is only fair that we reward our leadership team if we deliver. This is not an increase in fixed remuneration. This is a what-if reward for success. And I think you need to take the reward and understand that it's, which I'm sure you do, that it applies for the period to FY '25. So this is not a 1-year thing. This is '22, '23, '24, '25. So I think you have to look at it in that context. I hope that responds to your questions, Eric. All right. Any other questions from the floor, please? I would like to add that we have a very high 80% range support from our shareholders. I think every top 10 shareholders supports this resolution, which you'll see as we move further through the meeting. Could I ask, Peter, any questions on the line?

There are 2 questions, Roger, on this item. I'll read the first, they're both from Mr. Stephen Mayne.

Hard to hear you.

I haven't started yet. The first question, when disclosing the outcome of voting on all resolutions today, including this item dealing with Michael Dwyer's reelection, I beg your pardon, that's clearly allocated to the wrong question. Could you please advise the ASX how many shareholders voted for and against each item similar to what happens with the scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions. And was the disclosure initiative adopted by the likes of Metcash, our team in Dexus, after their 2021 AGMs? Also, does Mr. Dwyer support publication of AGM transcripts? And will he lobby to make this happen, along with the publication of a webcast archive?

Well, Stephen, thank you for your question. The answer to your question about the details of voting results is, yes, we will. Peter, can you just elaborate on my second question, please? That was a multiheaded question.

The second part of the question was actually addressed to Michael. Does Mr. Dwyer support the publication of AGM transcripts? And will he lobby to make this happen, along with the publication of a webcast archive?

It's not a question I've considered. From the top of my head, I have no reservations about what is being suggested. I would suggest to our Chair that we might consider this as a Board and the organization at our next meeting. Thank you.

Happy to do so. Next question, Peter.

So the next question, and again, of course, from Mr. Stephen Mayne. What is the Iress' policy position on making political donations? And will we be making any related to the current -- or will we be making any related to the current federal election? Will you consider following the lead of companies like BHP and Rio Tinto by strictly banning all forms of donations, including cash for access arrangements and 6-figure subscription deals to attend party events, something which the likes of ASX and Woodside have done for many years with the labor and liberal parties?

Stephen, thanks for your question. I'm not going to make policy on the fly, but let me be really clear. We're a software company, we're not political. End of story. Next question.

There are no further questions, Roger, on this item.

Thank you. I think you can see the proxies on the screen, the voting procedures, as previously followed. And we will just pause while people vote, please. [Voting]

Okay. I'll now move to resolutions 3A and 3B, which relates to the grant of equity rights and performance rights to our Managing Director and CEO, Mr. Andrew Walsh, in relation to the 2022 executive remuneration framework. The following comments address resolutions 3A and 3B together, which I'll then put separately and in turn. The executive remuneration framework here at Iress comprises 3 components: base salary, equity rights and performance rights. The Board believes that, together, these components provide an appropriate remuneration framework for the business. Notably, Iress doesn't operate a short-term incentive bonus scheme. The base salary and proposed grant of equity rights to the CEO remain unchanged from the previous year. Now we've -- I'm sounding like a scratched record because we've covered this a little bit. But in July '21, we launched a strategy to accelerate growth and improve returns. And the strategy made it clear that the way we structure and allocate incentives would need to change in order to drive the business towards its more focused 2025 goals. Hence, the Board has modified the performance right component of executive remuneration, including for Andrew, to ensure that vesting -- investing the value attributable to the performance rights is directly aligned with the attainment of our goals. We are seeking shareholder approval for the grant of equity rights and performance rights to Andrew in 2022. Details are obviously -- and key terms of each of the grants are shown in the notice of meeting, and they are also detailed in the remuneration report. So if I turn to each resolution, 3A is that for the purposes of ASX Listing Rule 10.14 and all other purposes, the grant of 79,592 equity rights to the Managing Director and CEO, Mr. Andrew Walsh, and the provision of ordinary shares on exercise of those equity rights under the Iress equity participation plan be approved. This resolution is now before you. The equity rights will constitute 10% of Andrew's total remuneration. It will have a 2-year vesting period, followed by a mandatory 2-year holding lock applied to any shares provided on exercise of the equity rights. The Board, in proposing and supporting the resolution, considers that the incentive arrangements for Andrew, including the proposed grant of equity rights, are appropriate and in the best interest of the company. Obviously, there's further information on this resolution in the explanatory notes to the notice of meeting. Could I now ask questions -- for questions from the floor before we take questions online? Are there any questions on 3A, please? Peter, anything from online?

Yes, Roger, we have one question, also from Stephen Mayne. It's actually several questions embedded. So I'll read it and, by all means, come back to each component. Did any of the main proxy advisers, ACSI, Ownership Matters, Glass Lewis, ISS and the ASA, recommend a vote against any of today's resolutions? Which of the proxy advisers are covering us? And are they -- are we aware of what they said? Does the Chair and CEO have a view about the proposed changes to the Australian Proxy Adviser Regulations, which would force proxy advisers to fact check their reports by supplying companies with a copy as it was simultaneously sent to paying clients, and then giving companies a right of reply to correct any errors by the ASX Announcements platform? The proposal was blocked by the Senate. But Treasurer, Josh Frydenberg, is expected to try it again if the government has reelected and he holds his seat. Should he do this?

That's it? Thank you. Stephen, you're outdoing yourself today. Well, there are 4 major proxy advisers operating in Australia: ACSI, Glass Lewis, ISS and Ownership Matters. We engage extensively with all 4 of them. As I mentioned in my Chair address, ISS had an issue with the rem report and the resolutions to grant equity rights and performance rights to Andrew. We had constructive and vigorous discussions with ISS about that. We agreed to disagree. In the end, we took the matter direct to shareholders and received in the range of 86% to 88% support, as you'll see on the screens, for everything at this meeting. So I think we've disclosed quite clearly where the dissent is, and we also have the support of a vast majority of our shareholders. As for the whole fact-checking right of replay issue, I have a view. Again, we are a software business. We are in the business of focusing on what we can control and not the things we can't control. We have constructive and healthy relationships with proxy advisers. There is a well-trodden path to dealing with these issues, which we are happy to follow. And this year, we've had a lot on the agenda to get through. And I feel that our consultations with proxy advisers and shareholders have delivered an appropriate outcome. So look, if the Treasurer is reelected and changes the rules, we'll deal with them. But the rules that we have today function perfectly well. Next question?

There are no further questions on this item, Roger.

Thank you. Okay. Well, the proxies received are there on the screen. Time to vote. Please now either vote for, against or abstain. A reminder that voting is open on all resolutions and will remain open until I declare it closed at the end of the meeting. We'll pause for a minute and allow you to vote. [Voting]

Okay. Moving to resolution 3B, which is that, for the purpose of ASX Listing Rule 10.14 and all other purposes, the grant of 741,820 performance rights to the Managing Director and CEO, Mr. Andrew Walsh, and the provision of ordinary shares on exercise of those performance rights under the Iress Equity Participation Plan, be approved. The resolution is before you now. Resolution 3B is to approve the grant of 741,820 performance rights to Andrew as part of his variable remuneration for the 2022 to '25 period. Notably, the Board does not intend to grant any performance right in 2023, meaning that the proposed grant is intended to be the only grant of performance rights to Andrew relating to delivery of the company's 2025 goals. The performance rights, which are absolutely at risk, will constitute 80% of annual total remuneration and will be split into 2 equal portions, with a 3-year and 4-year measurement period, respectively. I have covered the tiers of performance conditions in previous discussions, but just to reiterate, we will achieve a 10% compounding total shareholder return each year. We've got platform, return on invested capital and EPS hurdles to cross as well for these performance rights to fully vest. Again, details of the metrics and how their work have been provided in the notice of meeting. The Board, in proposing and supporting the resolution, considers that the incentive arrangements for Andrew, including a grant of performance rights, are appropriate and in the best interest of the company. We, of course, draw your attention to the explanatory notes to the notice of meeting for more fulsome details. Are there any questions on this resolution from shareholders and proxy holders here in person? Nothing from the floor. Peter, anything online?

No, there are no questions, Roger.

Right. Thank you. Well, in that case, the proxies received are again on the screen. We'll just give you a few seconds to vote for, against or abstain to 3B. Again, I remind you that voting is open on all resolutions and will remain open until we declare it closed. [Voting]

Thank you. That concludes our discussion on the items of business. I'll now move to close voting. Please ensure that you've cast your vote on all resolutions. I'll just pause for a few more seconds to allow you to finalize your votes. Computershare representatives will collect the voting papers of those attending in person. Now we see the purple box is working the floor. [Voting]

Have all voting papers been completed and collected? That's fine. I now declare the poll closed. I will now, in fact, given that all voting has been completed, we'll declare the poll closed, which leads us to the end of the meeting. The results will be released to ASX later today and will be available on our website. I'd like to thank shareholders, proxy holders and visitors for their attendance today and now declare the meeting closed. Thank you.