Perpetual Limited (PPT) Earnings Call Transcript & Summary

Good morning. I'm Tony D'Aloisio, the Chairman of Perpetual. It's 10 a.m., and I've been advised that a quorum is present. And I declare this 2024 Annual General Meeting open, and I welcome you all to Perpetual's AGM. We acknowledge the traditional owners of the land we're present on today, the Gadigal People of the Eora Nation as the custodians of this land, recognizing their connection to land, waters and community. We pay our respects to Australia's First People and to their elders, past, present and emerging. We'd to extend our respect and welcome any Aboriginal Torres Strait Islander people joining us today. We also acknowledge the traditional owners of the many lands where our attendees are situated today, both here and in Australia. I'd clearly to welcome our shareholders, proxy holders and guests, both in person and online. For those of you who are joining online today, we hope you found the online guide from Link Market Services and our welcome and summary useful. I will say a few words shortly, concerning how I propose to run this hybrid meeting and the procedure for voting and submitting questions. But just before I do that and do the introductions, just to remind you, if there's an emergency, please listen for instructions from the hotel and follow the directions of the venue staff. I would to take the opportunity to introduce our Board and management and our auditor. In the room, seated at the main table, I'm joined by Bernard Reilly, our new Chief Executive Officer; Sylvie Dimarco, as you know, is our Company Secretary; Ian Hammond, Non-Executive Director; Greg Cooper, Non-Executive Director; Nancy fox, Non-Executive Director and Chairman of the People and Remuneration Committee; Christopher Jones, Non-Executive Director; Paul Ruiz, Non-Executive Director; Mona Aboelnaga Kanaan, Non-Executive Director; and Phil Wagstaff, Non-Executive Director. Including me, that's a Board of 10. I should add, sorry, Fiona. Fiona Trafford-Walker, our tenth Director, who's a Non-Executive Director, is currently visiting in New York, and she's joining us online. I'd also to particularly thank Christopher, Mona and Phil for traveling to Australia to be here at our AGM. it's important also to inform you of our senior executives that are here in person and sitting in the front row, and they too will be available. I might just ask you to stand: Chris Green, our CFO; Craig Squires,, our Chief Operating Officer; Richard McCarthy; Chief Executive, Corporate Trust; Mark Smith, Chief Executive, Wealth Management; our Chief People Officer, Paul Chasemore. Sam Mosse, our Chief Risk and Sustainability Officer, couldn't make it this morning, but that's been delegated to Kean Hao Lim, Head of Compliance, APAC, and he's here instead, so thank you. Finally, let me welcome Brendan Twining, who is the company's auditor from KPMG. Brendan is somewhere. Yes, there's Brendan. He is retiring from this role in accordance with rotation policies. I'd simply to take the opportunity to thank Brendan for all his work and professionalism over the past 5 years. Caoimhe Toouli from KPMG will be the new global lead partner and will take over from the end of the AGM, I think. We've got a proper changeover. Well done. Brendan is here to answer questions that shareholders may have in relation to the financial statements and the auditor's independence and will deal with those questions under the first item of the agenda. So they're the formalities, let me move to the business agenda for today. We have got the following items: the presentation of the financial statements, the adoption of the remuneration report, the reappointment of Mona, the reappointment of Paul, the reappointment of Philip, the appointment of Rodney Forrest as Non-Executive Director, the approval of the hurdled equity grant for the new CEO and Managing Director, and the renewal of what we do every 3 years, proportional takeover provisions. There will be opportunities to ask questions in relation to each item of the business. The Notice of Meeting has been circulated, and I'll take it as read. Now a word on proxies. As described in the Notice of Meeting, proxy appointments were to be lodged 48 hours before the meeting. Where I, as Chairman of the meeting, have been appointed as the shareholder proxy or become their proxy by default, I will vote all directed proxies as directed in the proxy appointment and I will vote any available undirected proxies in favor for resolutions 1, 2, 3, 4, 6 and 7. But I'll vote against in relation to resolution 5 in accordance with the Board's recommendation against that resolution. I'll explain that more as we get into the voting. If you are participating as a shareholder and hold proxies, then you would have received an e-mail setting out instructions on how to vote those proxies. Now importantly, formalities around questions at the meeting. Following the introduction of the resolution or the item of business, there will be the opportunity for comments and questions. Each of the resolutions today will be an ordinary resolution that is to be passed by a simple majority. And the first item of business, of course, doesn't carry a resolution, and I'll also explain that. But on the formalities of voting, there's voting for shareholders in the room. Voting on each resolution will be conducted by way of a poll. Karen Hopkins from KPMG will act as scrutineer and Regi Harbron of Link Market Services as a returning officer for the purpose of the poll. You will have received a voting card, a yellow voting card, when you registered today. This will be used to cast your vote in person here at the meeting. Once all votes and proxies are counted, the announcement will be made later today at the ASX of the results. I should also note that we have a room next door allocated as a flow-on room in case this room is full, which it seems to be. So if you are in that room and have a question, please see our Perpetual representative to make sure that you'll be able to ask your questions. Voting online, the actual poll is now open, and you can cast your vote at any time. You may also change your vote at any point until I declare the poll closed. The poll will in effect remain open for 5 minutes after the end of today's meeting. To vote online, follow the steps in the Link portal. If you experience difficulties, as indicated, please call that number. So that's voting. Then on the formalities for asking questions, as I said, I'll introduce each resolution. I'll then -- or each item of business or resolution. I'll then take questions from shareholders on the floor of the meeting and then using the online platform and then the web phone. If you ask a question here in the room, please move to one of the fixed microphones located on either side of the room. Please provide your full name to the staff member standing there, so they can introduce you prior to asking your question. We encourage you to use the microphones at the back for any guest that may not be able to make it to a microphone on the side. And please do that, simply raise your hand and we'll bring a roving microphone to you. Questions from shareholders online. For those that are participating online, there's an opportunity to ask written questions during the meeting, and this function is also open. And as you can see, there's a procedure to follow with the Link portal. Basically, here in the room, the Company Secretary will read the question. They will be read in full, as submitted, and then we'll endeavor to answer the questions. I'll do that by responding or by designating one of the other Board members or management to respond. For audio questions online, you can have audio questions. That's this use of the so-called web phone on the Link portal, and there are steps associated with that, which are explained. That completes the formalities on proxies, on voting, on questions. Essentially, it's a meeting where we are encouraging your participation whether it be in the room or online or through the so-called web phone. Okay, that completes, as I said, the formalities. I now want to move to the Chairman's address, and that will be followed by introducing Bernard, our CEO, for his address. Now I have today a number of items to cover, and I will spend some time on these, including our results, which typically the CEO will talk to. But given the CEO transition, I will cover these. And as you can see from that list, I will cover the results, the scheme of arrangement with KKR, Board changes and the Board's remuneration report. There has been a lot of noise about this wonderful company, and one of my key objectives today, taking through this presentation, is to help shareholders navigate through that noise. I will reiterate throughout that we do have a great company. First, let me just begin by -- before moving to these items, as Chairman and on behalf of the Board, I want to acknowledge and thank everyone within the Perpetual Group, both here and overseas, for their continued dedication in what has been another significant year for the group. We now have over 1,800 staff across the globe. A significant year in the sense that our staff and management have needed to continue to grow the businesses, look after existing clients, managed the continued integration of the Pendal acquisition, and complete a strategic review that has led to a scheme to put to you, as shareholders, to vote on concerning the separation of 2 businesses. As a Board, we are proud of their dedication and their efforts. But our shareholders and the Board, our teams recognize the need to improve our results and the need to demonstrate delivery of a better return for shareholders on the capital that's been employed in asset management acquisitions and to complete the work in relation to the scheme. Speaking on behalf of management staff and the Board, I know that they remain committed and energetic to continuing to do that work. And as a Board, we feel we've created the culture and the incentives for them to operate at their best. As I said, shortly, I will ask the newly appointed CEO to deliver his address. Just to introduce, we announced Bernard's appointment to succeed Rob Adams as Chief Executive Officer and Managing Director in August. Bernard, or Bern, as he likes to be known, has more than 30 years' experience in international and domestic asset management and banking and finance sectors. He was formerly a CEO of Australian Retirement Trust, the $300 billion superfund formed in February 2022 through the merger of Sunsuper and QSuper. Bern commenced with us on the 2nd of September, joining at a critical period of the group, particularly with a mandate to drive a new direction to improve performance and efficiency in our asset management businesses. And you'll get the opportunity here from Bernard, as I said, in a moment. But on behalf of the Board, I also to thank Rob Adams. Rob joined on the 24th of September 2018, at a time where each of our Perpetual businesses were under pressure to grow earnings. He worked with his management team and the Board to make investments in corporate trust and in wealth management businesses and on a strategy to have an asset management business which would have the scale and investment capabilities to be more competitive. In Asset Management, he inherited a good business focused on Australian equities and investment capabilities but with concentration and outflow risks. Diversification to meet further competition and future industry cycles was important. Rob was a dedicated CEO, and we thank him. Let me now turn to our results. We announced our results on the 29th of August, and they're set out in the annual report. I'll just provide a brief summary to assist in asking questions later in the meeting. But in terms of headline, you will see from this slide that revenues were up 32% and underlying profit after-tax was up 26% on the prior year. What underpinned these was the improved performance of Corporate Trust. The underlying profit before tax of Corporate Trust of $85 million was up 4%. Its funds under administration increased by 4% to $1.2 trillion. There was improved performance in Wealth Management. Its underlying profit before tax was $54 million or up 15% on last year, its funds under advice to $19.8 billion or 7% higher than the prior year. Asset Management reported underlying profit before tax of $200.4 million compared to $132.7 million on the prior year, which was driven by the full contribution of the Pendal Group. The business on the whole reported stable revenue margins. Within the equities asset classes, average revenues increased by 2%. Its total assets under management for financial year '24 were up to $215 billion, up on financial year '23. Investment performance remained robust with 66% of strategies outperforming their benchmarks over 3 years to June '24. Now while expenses were up for the year as we fully integrated Pendal, the synergy achievement of $80 million was completed 7 months earlier than our original target. So just by way of stock take, these businesses are strategically in a much better shape today than they were 5 years ago. In the case of Asset Management, in addition to the increase in assets under management, it has exceptional investment professionals as well as both geographic and product diversification. The Trillium, Barrow Hanley and Pendal acquisitions were important acquisitions in the development of this platform. Funds under management moved from $27 billion to $215 billion at the end of June '24. And in an announcement we made today, they're now at $222 billion. That's a big change for this organization. As you expect, it takes time to get the full returns from those investments. The disappointing aspect of our performance relates primarily to the outflow of funds from the Asset Management business throughout financial year '24 and particularly in the second half. While overall for the year, our assets under management grew, as I've outlined, the net outflow that is the difference between flows in and flows out was negative $18.4 billion driven mostly by J O Hambro and TSW. Now as you would expect, at the time of the acquisition of Pendal, and making our judgment, clearly, we looked at the expected flows in future earnings. The Board clearly stress-tested that advice from management and took advice externally as well in terms of what the forward earnings could look like. Now we've examined the reasons why expectations on flows have not been met in J O Hambro. It was investment performance in 2 key strategies that led to outflows and additional separate outflows following the departure of a portfolio manager for a specific strategy. TSW net outflows were driven by partial redemptions from clients due to portfolio rebalancing and asset allocation shifts. The Board, clearly recognizing that, have taken steps. First, as part of the announcement of our results, we outlined further cost-outs of $25 million to $35 million plus other simplification initiatives to improve the asset management business. Secondly, and more importantly, our Deputy Chair, Greg Cooper, headed the recruitment of our new CEO, and he and Bern have been working with our asset management teams on additional measures to improve performance in Asset Management. They have fresh eyes and will be invaluable. Now across our multi-boutique Asset Management business, flows fluctuate and, for that reason, we'll continue to focus on the medium to longer term. I mean, by way of example, we have today put out our quarterly update on flows. And you will see for the quarter that net flows are slightly up. Overall, while that's good news, given where we were at 30 June, it doesn't take away for the need to focus on the priorities that Bern will talk to in his address in terms of cost reduction and revenue improvement. I think the Board reiterates that we have strong businesses, and we continue the path towards a continued buildup or build-out of our leading multi-boutique Asset Management business. We are confident the financial performance will improve. And as we enter this new phase with a new leadership and more focused business, we also do that fully aware of the structural and cyclical factors impacting the Asset Management business in Australia and globally. These factors include increasing allocations to passive, in-sourcing by major pension funds, increasing regulatory cost, and the impact of AI. These pressures are not just impacting on us. They're also impacting on our competitors. However, with the geographic and channel and style diversification we now have, we feel that we are going to be much better positioned to meet these challenges. There are two additional features to mention in terms of these results. The first is the impairment of goodwill. This is a noncash item. Impairment focuses on the forward earnings. And with the Asset Management business, flows are key because of the net flow position that I talked to earlier in relation to Hambro and TSW where management reassessed and moderated flows, forward-looking flows, and that led to this impairment adjustment. So the impairment doesn't impact on cash. But the second one, which does impact available cash, is the additional items or costs that we're incurring with the integration of Pendal and the costs associated with the strategic review. So moving to dividends and balance sheet. Our total dividend of $0.53 was declared, which was 50% franked. Total dividends for the year were $1.18 per share, representing a payout ratio of 65% for the full year, which is within the Board's dividend policy to pay between 60% and 90% of underlying profit after-tax and dividends to shareholders. Now the dividend was lower than in previous years given the cash requirements of the Pendal integration and the separation of the Wealth and Corporate Trust businesses as part of the strategic review. The balance sheet as of 30th of June, which I comment each year, remains robust despite the impact of U.S. currency movements and the impairment charge. Following debt repayments over the year, borrowings decreased by 8% or $55.4 million total borrowings on this slide of $679 million. But let me emphasize that we continue to have the capacity and strength to support our debt position. And the Board, through the Audit, Risk and Compliance Committee monitors the group's debt position on an ongoing basis. So those are the results, where we're headed with the Asset Management business and our dividend and balance sheet. As I said, Bernard, in his presentation, will go into much more detail about the forward picture for the Asset Management business. What I now want to do is to move to the strategic review and the KKR transaction. Now we announced this transaction on the 8th of May and then provided an update with our results on the 29th of August. The next major update in this will be when the scheme book is released. Now the nature of these business divestments take time depending on their complexity. The timing and process is not unique to the Perpetual scheme, and the most relevant information for shareholders will be in the scheme booklet, which is nearer to the time of the vote. That is the most important document for you to read. It will set out the details, all the details you would need. Importantly, it will have the independent expert's report and we will make sure that there will be the case for as well as the case against the separation of these businesses. As we said, shareholders are expected to receive cash proceeds from the transaction. When presenting our results, we gave an indication of $8.38 to $9.82, which is based on the information available at that time and subject to the assumptions that were set out. Clearly, further work is going on, and the information on the cash proceeds will be updated in the scheme booklet which, as I said, is the key document here. In bringing the scheme to you, we've provided shareholders with options to vote for the scheme for the cash return or not and continue with the 3 businesses. While the Board recognizes that in the end, it's a matter for shareholders, the Board is recommending that shareholders vote in favor of the scheme and certainly, to do so, in the absence of a superior proposal and subject to the independent experts' conclusions and report. Importantly, shareholders will retain ownership in what will be the stand-alone Asset Management business, which is expected to be the largest ASX-listed asset manager by assets under management and the only ASX-listed company offering investors the opportunity to share in the long-term performance of a highly diversified, active, global asset manager. The market valuation of that Asset Management business will be an important consideration for shareholders when they consider the scheme booklet. And as we get closer to the vote, we will continue to implement changes to demonstrate the value of that Asset Management business and hope, by then, the value should become clearer. But you, as shareholders, need to also assess that long-term value. And I've talked about leading to the scheme booklet. There are a number of steps that still need to be completed, and these are confirming the cash distribution, the independent expert's report. The scheme booklet, as I said, which will have the case for and the case against, it needs court approval and needs, importantly, the shareholder vote. And there are important condition precedents to be met in relation to regulatory authorities, such as FIRB and ASIC and other overseas regulators. I know that's a lot, and I know there's time, but all of this is important to get to the point where you can, as shareholders, really assess what the worth is, what the cash proceeds will be and make a judgment about, "Well, do we agree with the Board that this is time to realize the gain on these businesses or do we think we prefer to retain them?" And our job is to get you to that position as shareholders. And in terms of timing, what we said, our objective is to bring that to a vote early in calendar '25. That remains our objective. But as I've just said, there are matters outside our control and involve third-parties, such as regulatory approvals and finalization of discussions on taxes and duties. And as I said, as we get closer and we get line of sight on these, we'll be able to update the market. In the meantime, and importantly, we will continue to run these 3 businesses as hard as we have done in the past, and we will continue to implement the changes I've referred to, and Bern and Greg are working on. But I'd to make, if you bear with me, a couple of additional comments on the scheme. The first is, "Tony, here, we've got good businesses, so why are you bringing the scheme to us?" Look, leading into the last year's AGM and following consultation with key shareholders, it was quite apparent that a number saw a conglomerate discount in Perpetual share price. That is, the Corporate Trust and Wealth Management businesses were not being properly factored into the share price, and separation of those businesses was seen as a way of unlocking value for shareholders and while creating a single purpose, more focused asset management company, which was debt-free. The Board's management and its external investment bank advisers confirm that value could be created by separating these 3 businesses. As that assessment was going on, Soul Pattinson sent a nonbinding indicative offer to Perpetual, the effect of which was to separate these businesses, with asset management remaining with Perpetual shareholders. The Board assessed that offer and rejected it as not providing sufficient value for those businesses. And in December '23, we announced our strategic review to examine a broad range of options to see what we could unlock for shareholders. And we considered, we looked at retention of all businesses, possible separation of Corporate Trust and Wealth Management as well as other options. And in doing that, what we were trying to make a judgment on, is it better to part with these businesses and realize value? Or is it to keep them? And we obviously tested price and value throughout that process. And that then led to my announcing the scheme and that we'd entered into the scheme implementation deed, which was not -- it needed a lot of conditions to be fulfilled, which I've referred to, but that's the way these things are done given our continuous disclosure obligations and also that the Board would want shareholders to know what it was doing in relation to these businesses. So the announcement of this scheme was that an affiliate of KKR global investment bank would acquire the Wealth Management and Corporate businesses for $2.175 billion, the $2.175 billion offer by KKR for Corporate Trust, and management represented an attractive 13.7x the prior 12 months' EBITDA and 16.3x the last 12 months' EBIT multiples for those businesses. And this was clearly the superior proposal on a number of the criteria that the Board examined, clearly, the most important being the value realized. So the effect of this transaction, if approved, will be to realize the cash returns to shareholders and create the debt-free ASX-listed Global Asset Management which, as I said earlier, is much better placed to compete and meet the headwinds that I spoke about. And as I said, the Board has committed to recommending that to shareholders at a vote and, as I said, subject to there being no superior proposal and the independent expert concluding that is in the best interest of shareholders. The second point I'd to make is to say, in relation to this, something about the brand, which I know it's an important part of all our teams that have been associated with Perpetual, we do understand its importance for our Australian businesses. And the significance of this decision for some of our shareholders and employees to sell the brand has been difficult. The brand was first established 138 years ago when the personal trustee business commenced operation. That business is now our wealth business, Wealth Management business. The key points I'd to make is that the brand will go with the separation, if that's approved, and it simply moves from public hands to private hands. It will continue to be used by Corporate Trust and by Wealth Management. The price that was negotiated clearly included value for the brand. And our Australian equities team would have the continued use of the Perpetual brand for a sufficient period of time post implementation of the transaction. Now we know that the history of the Perpetual brand has been significant for the Australian asset management industry, and hence, negotiation of an appropriate agreed period of use was important. But just to go back and look at where these businesses are at and looking at what our footprint now is, Perpetual's global Asset Management Business trades under a number of recognized global brands. It trades under J O Hambro and Trillium, and the Pendal, and the Barrow Hanley, TSW and Regnan and, of course, importantly, Perpetual. So while it's important in Australia and we need to protect it and work with it, we have a much broader footprint and a much broader number of brands, which are important, to underpin the Asset Management business. So I wanted to cover those points in relation to the scheme and clearly happy to take questions. But as I say, it's an important consideration for shareholders. And rather than continue to speculate, we need to let the time follow through. And then when we get to the scheme booklet and the vote, we'll have, I'm sure, more discussion with shareholders in relation to what we're proposing. Let me then turn to Board changes. It's really Board changes and Board refreshing and change of Chairman. Turning to that, we now in effect have a Board of 10, and our objective here is to reduce it to 7 in the first instance following my stepping down. And probably, it will be a matter for the future Board, but that could be a good size. They may reduce it further given what will then be the operations of the company, but that's a matter for the future. In terms of the changes themselves, you may recall that offshore Non-Executive Director Karen Matthews joined with the Pendal acquisition, and she moved on for personal reasons, her own reasons, and was replaced by Phil Wagstaff as a Non-Executive Director, who is here today. Phil is U.K.-based and brings a deep understanding of the asset management sector and distribution, having served in executive roles in large global asset management business for over 35 years. In May '24, we announced the appointment of Greg Cooper as Deputy Chairman, focused on assisting the Board, ensuring the Asset Management business is well positioned to transition. Long-standing directors, Ian Hammond and Nancy Fox, will retire following today's meeting. That's in accordance with Perpetual's rotation policy. We will miss Ian and Nancy on the Board, who are prodigious producers and contributors, Ian as Chair of Audit, Risk and Compliance; and Nancy, People and Remuneration. And on behalf of the Board and directors, I'd to thank both Nancy and Ian for their counsel, guidance and leadership. In September, we announced the appointment of Paul Ruiz as Non-Executive Director, foreshadowed to take over the role from Ian who's heading Audit and Risk. Paul currently serves as a Non-Executive Director on a number of Boards. And he will go through that when Paul comes up for election later in the meeting. But it's important that Paul has a deep accounting and financial services experience, having spent a number of years at KPMG where he ceased employment in 2016, 8 years ago. As KPMG are Perpetual's auditors, it is important that I make clear that Paul was never part of Perpetual's audit team, and there is no ongoing financial other arrangements between KPMG and Paul. The Board has been rigorous in assuring itself that Paul is and will be independent and free of any bias, interest or position that could influence his capacity to bring an independent judgment to the Board and in his role as chairing Audit, Risk and Compliance. Fiona Trafford-Walker, who's online, will assume the role of Chair of People and Remuneration, replacing Nancy. We also announced with the results that although I was reelected for my last term at our last AGM, it makes sense for orderly succession that I retire on the completion of the vote for the scheme. The Board has nominated Deputy Chairman Greg Cooper to assume the role of Chairman on my retirement, and Greg is particularly well qualified to chair Perpetual. Now at today's meeting, shareholders will have the opportunity to vote on the reappointments of Paul and Phil as well as the reappointment of Mona. And each of them will address their appointments later. Mona is U.S.-based and brings more international experience -- or important international experience. So the Board believes that the skills and experience that the Board has or that they have will ensure the guidance and leadership that's required through the upcoming period of change and clearly supports their reappointment. Now finally, shareholders will have an opportunity to vote on the election of Mr. Rodney Forrest, who has nominated himself for election in accordance with Section 20.3 (sic) [ Section 20.2.3 ] of our constitution. The Board, as I said, and I'll explain, does not support Mr. Forrest's nomination, and we'll speak to that later. And there will be an opportunity for him to speak and as there is for other directors seeking reappointment, and for you to ask questions. Now to the remuneration report before I give my closing remarks. And it's important to make some initial comments on the voting of that report. Nancy Fox will talk more to this later in the meeting. Following extensive engagement with shareholders, it's quite apparent that a significant number will vote against the report this year, and that means that we will face a first strike against our remuneration report at this meeting. That then puts the Board on notice that it needs to make changes, and there will be a further vote next year. As you know, if there's a second strike, you then have the opportunity to vacate the whole Board. Now to make some comments. In a period of heightened change and uncertainty following the announcement of the strategic review, the Board's view was that the potential leadership instability was a significant risk for Perpetual. The Board's business judgment was that it was in the best interest of shareholders, and that would be served through remuneration arrangements that we put in place, which did include retention arrangements and STI, short-term incentives. The Board's judgment was also that the negotiated separation arrangements with the then CEO reflect that his contribution and efforts then ensured his continued availability as we transitioned to new leadership. Alignment with shareholder returns was not forgotten, it was through the long-term incentives, which are tied to absolute TSR. In the 5 years since that's been in place and have been introduced, these have not vested for executives and the CEO. Although our reason is explained in the remuneration report, we're clearly humbled by the vote against from shareholders. And we will, as Nancy will explain, review the framework and the arrangements going forward. And it's important to note that we have no plans in place for retention payments for our leadership team this financial year. In closing that topic, just a brief word on our sustainability report. While it's been a year of significant change, we've continued to focus on our sustainability commitments. We released our sustainability report for the year in September, and I encourage our shareholders to read it. We have progressed many of our commitments across our key areas of governance, planet, people and communities, with 26 of the 35 commitments on track or achieved. So let me conclude by apologizing on behalf of the Board that our share price is not showing improvement compared to this time last year. But we do respectfully ask shareholders, ask you to focus with the Board on these things: the soundness of the 3 businesses we have, the steps we've put in place to get the benefits, and the use of your capital and the Asset Management acquisition strategy with new leadership; the option you have, subject to satisfaction of relevant conditions to vote on a significant transaction for a more immediate cash return and retention of your investment in a debt-free, single-purpose asset management company with an international coverage and diversified product set; and the changes to the Board to bring fresh perspective to the matters at hand for Perpetual and these initiatives and to take these initiatives forward in the best interest of you, the shareholders. So on behalf of the Board, I'd to thank you, our shareholders, for your continued support. I apologize if it was a long address, but we did feel as a Board that it was important that we see ourselves through the noise and really focus on what is a wonderful business and options that are available to shareholders with the scheme. And with that, I'll now hand over to Bern. Thanks, Bern.

Thank you, Tony, and good morning, everyone. It's a great pleasure to be here to address you today as your CEO and Managing Director at my first Perpetual AGM. Even in the currently challenging environment, I am very positive about the future prospects for Perpetual's 3 businesses. Before I share with you my initial observations of Perpetual, let me formally introduce myself, provide you with some background on me. I have more than 30 years of experience in financial services, both in Australia and offshore. As the Chair mentioned, most recently, I was the CEO of Australian Retirement Trust, where I led the successful merger and integration of Sunsuper and QSuper to create one of Australia's largest superannuation fund. But prior to that, I spent 24 years in senior and executive positions at State Street Global Advisors, one of the world's largest asset managers. I've managed money, I've managed distribution teams and I've managed asset management businesses. Over that period, I've worked in Sydney, Hong Kong and Boston. I come to Perpetual with a deep understanding of the global asset management sector. I've been at Perpetual now for just over 6 weeks, and I spent time here in Australia, in the U.S. and the U.K., engaging with investment teams and staff as well as clients and shareholders. I'd to share with you some of my initial observations. Perpetual has high-quality asset management boutiques with excellent investment capabilities. We have strong talent in all areas of the business, and they are actually really positive about the future. We have a diverse client base across large sophisticated global investors and intermediary platforms. In Asset Management, we have solid foundations in the U.S. and in Australia and's a platform that can be leveraged in the U.K. and Europe. And we're really yet to actually address the opportunities that Asia addresses for us. In terms of areas we need to improve on, firstly, the business needs to be more efficient and nimble, and there needs to be a reduction in costs. And secondly, in Asset Management, we need to turn around the outflows. As you heard from the Chairman, our recent outflows have been higher than anticipated. Outflows are driven by a few factors: firstly, investment underperformance; business stability is second; and market dynamics is third. We do have pockets of investment underperformance and they need to be addressed. Presenting the scheme to shareholders for their approval will lead to greater business certainty. I note the Chairman provided an update this morning on the transaction. And finally, innovating will help us retain clients and grow the business, but this is going to take some time. Turning to my immediate priorities from here. I have two clear, immediate priorities. Firstly is to progress a successful separation of Wealth Management and Corporate Trust businesses, subject to shareholder vote; and second is to ensure asset management is set up for success as a stand-alone business. In Asset Management, my priorities are to, firstly, confirm our future operating model and the structure of the teams around that. We need to rightsize the cost base. At the financial year '24 results, before I joined, Perpetual announced a $25 million to $35 million per annum simplification program targeted to be delivered over 2 years. I've reviewed that, and I reiterate that target today. I believe we can actually go further than that, and I'm undertaking some work right now and over the coming months to determine what the plan is from here, with a view to communicating further with you, as shareholders, as part of our half year results early in the new year. Additionally, we need to refresh our distribution strategy to both support client retention as well as grow the business. And finally, I'm looking to develop a turnaround plan for the J O Hambro business, which has been impacted by material outflows since its acquisition. These are my immediate priorities. And as I mentioned, I expect to come back to shareholders once I've further developed the strategy and the plan for the future. My vision for the Asset Management business is to be leading in global multi-boutique asset management, combining institutional strength in global distribution with the agility and personalization of a boutique. Today and in the future, asset owners are awarding mandates to boutique managers who are nimble and able to deliver strong outflow. I believe we have all the right ingredients to be that. Turning to the next slide. The new Asset Management business will leverage its strong position with over $220 billion in assets under management across 7 brands, a strong distribution team and capability set with a simplified operating model supported by a strong balance sheet. We plan to streamline central and support functions, simplifying our technology requirements and continuing to rationalize our products and our platform. Overall, it's about refining our model to drive operational excellence, agility and to better support our boutique businesses to grow. Turning to the quarterly results that we announced to the ASX this morning. The first quarter of financial year '25 saw growth in all 3 of our businesses. In Asset Management, assets under management increased by 3% supported by strong equity markets and positive net inflows, a material improvement to the prior quarter, but this highlights the volatility of quarterly flows in our business. Importantly, we saw a moderation in outflows in J O Hambro's strategies, the global and international select strategies, and we saw an improvement in net flows in the TSW boutique. Across the asset management boutiques, investment performance has improved since the last quarter, with 71% of our strategies outperforming their benchmark over a 3-year period to the 30 September. This strong investment performance confirms my view that we have excellent capabilities across our businesses. In Corporate Trust and Wealth Management, we reported steady growth in assets over the quarter, increasing funds under administration by 1% and funds under advice by 3%, respectively, with Wealth Management and its funds under advice benefiting from stronger markets. In conclusion, I would to reiterate that in my short time here, I believe the businesses have all the right foundations for success. We've achieved a lot in recent years. And in recent months, the team have made some good early progress in separating Perpetual's 3 businesses, so that each can stand on its own in the future. But there's plenty more work that needs to be done. Thank you for your time today. I'll now hand back to Tony.

Thanks, Bern. thank you, you certainly hit the ground running, and shareholders should be very pleased with the progress that you're making and will continue to make. We now come to the first item of business, which is to receive and consider the full financial statements, the reports of the directors and the auditor for financial year 30 June 2024. I now formally table the financial report, the directors' report and the auditor's report for that financial year. This is not a voting item at the meeting. And it's really an opportunity for you to ask questions of us and also of the auditor. And the way that I'll handle this section is, one, I'll invite questions from shareholders in the room. Then I will answer questions that we receive online, we'll answer those, and then the web phone. As I said, Brendan Twining, our auditor will be here and available for questions. So let's move to that. I should just mention that, if we can, the remuneration report is an item in itself. So questions around that, we're hoping to take with that part, with that report, and give an opportunity in this section to ask other questions, but that's a matter for you. I've been advised that there are no written questions prior to the meeting on this item, so we can now move to questions in the room and ask you to raise your hands and move to 1 of the 2 microphones. We'll let you absorb that for a moment. As I said, if you move to those, then the staff will ask you for your name and shareholder and so on, and then introduce you to the meeting, and then we go from there. So we got the first question.

Mr. Chairman, I'd to introduce Ms. Rita Mazalevskis.

I just want to ask a question, why are the financial reports and reports, in its entirety, not a resolution to vote on and approve given that you're a corporation, you have an AFSL, ABN, everything like that, the same as financial institutions, banks? And these reports are part of their voting mechanism as a resolution. So it just seems odd that shareholders don't have to approve it. I just wanted an explanation in regards to that.

it's embedded in Corporations or referred, in the sense that this is not a process that's particularly -- in my experience of public companies, this is what all public companies do, at least my experience. And it's nothing to do with the fact that these are in effect historical. They are factual statements of what's occurred. They've been audited. They've been presented. And the main emphasis for shareholders is the interrogation of those and asking questions, and it doesn't require a formal vote. That's the position. As a policy matter, that's a matter for you.

Yes. It just doesn't align with other corporations.

Well, I think it is a matter you may well want to take up outside this meeting.

So I just need clarity on questions because approving the financial reports and other reports in general, being directors' reports and everything, there are certain questions. So where would those questions be asked given that it's not a formal resolution?

Well, this is the meeting to ask those questions.

I know this is the meeting, but at what point?

Now.

Now? Okay. I'll let someone else go and then I can ask the question.

Brendan, did you want to comment on that at all from your experience as an auditor?

[indiscernible]

Yes. Okay. Becca?

Just to confirm that this is the law and there's no [indiscernible].

Thank you. Next question, please.

Chairman, I'd like to introduce [ Don Walker ].

Mr. Chairman, [ Don Walker ], and I'm a shareholder. Now you are not declaring a fully franked dividend. If you're not going to declare a fully franked dividend, how much would this cost PPT for the '24 year, please? Second question, how long will you continue not to declare a fully franked dividend? How many years, please?

I might ask Chris Green to comment on that because, obviously, franking depends on us having an Australian profit base. But I'll ask our CFO to answer your two questions.

Yes. So effectively, the proportion of the dividend that is franked depends on how much of our earnings come from Australia because any earnings from offshore are not eligible to receive those franking credits. So the 50% franking is a reflection of the balance in our franking account and the earnings we derived in the Australian business during the course of the year. So that's sort of the answer to the first one, which is proportion of franking between 0% and 100% will, going forward, largely be a function of how much the Australian earnings are as a proportion of the total earnings of the group around the world. And so going forward, for the next few years, it's the same answer in that how much of the earnings come from Australia will drive the franking.

Excuse me, sir, BHP have fully franked dividends. And they've got businesses overseas. How do you account for that?

They will have built up franking credits during the course of their history that allows them to do that.

But surely, you built up franking credits throughout the course of your history.

We have, and we've distributed those to shareholders. So we've distributed those franking credits.

We haven't housed them. Thank you. Thank you for the question. Number two, is it? Yes. Sorry, I'm just trying to work it out.

Chairman, I would like to introduce Mr. [ Roman Komitnikov ].

Mr. Chairman, I'm representing my personal shareholdings and my self-managed superfund. I have only one question and one request. Before I ask my question, I would like to explain where I'm coming from. This company is the second biggest shareholder for Star Entertainment Group. I don't have any problem with it because I'm also a shareholder of The Star Entertainment Group. I think that The Star Entertainment Group is under good management, it's a good investment and very good assets and good employees. The company was trading around $7 a couple of years ago and was trading $0.20 last week. Last year, at The Star Entertainment Group AGM, the small shareholder decided towards the Board and management out. You decided to support Board and management. My question to you is why we decided to support the Board and management. If you were supporting us, this Board and management would be out. The company would have avoided the second inquiry into Star, a new Board would have appointed new management much earlier and would not have this financial position as it is now. My request is to meet with the person who is running The Star Entertainment Group portfolio. Thank you.

Thank you for the question. You're really referring to investment decisions that are made by clearly one of our boutiques or the Australian equities, most likely, or Pendal or Perpetual. And it's a fairly clear rule within Perpetual that the management of money belongs to the portfolio managers. They do that and they make their decisions. And the Board runs the company overall but doesn't get involved in those issues. That's a well-established path across all asset managers. The best I can do is take your comment and relay it back, but I'm not in a position to be able to make any decision on that issue for you. But I will take it back and give it to the relevant asset management team.

Thank you. This is what I requested, to meet with him, to get an explanation. This company loses a lot of money because of this Board decision last year.

I'm not in a position to second-guess those decisions where these are very well established and they work, but happy to take that and take it forward for you. Next question, please?

Chairman, I would like to introduce David Kingston.

Chairman, I'm glad you've acknowledged disappointment with the share price because I think that's a critical issue for all shareholders. I'd like to make a few comments, and then I've got two questions at the end of my comments. Perpetual has been a great icon for many years, but there's been a lot of shareholder value destroyed in the last decade. Let's look at the facts, the cold hard facts. 10 years ago, Perpetual was trading around $50 a share. Five years ago, Perpetual is trading around $40 a share. Currently, it's trading at $20 a share. Now what's destroyed the value? Value destruction has significantly happened because of the overpriced acquisitions in recent years. Now let's look at what's happened in the last 5 years. It's been a tale of two cities. On the one hand, asset under management has gone through the roof. On the other hand, in direct contrast, the share price has fallen through the floor. Again, let's cut to the facts, and I'm going back a little bit further than in your summary this morning, Mr. Chairman. Financial year 2019, Perpetual had assets under management of $27 billion. Financial year '20, AUM of $28 billion. Then the big jump in '21, up to $98 billion when Perpetual acquired Barrow Hanley. And then another massive jump in '22, '23 to $227 billion of asset under management when Perpetual acquired Pendal. Notwithstanding that monstrous jump in assets under management, perhaps the thing that is most relevant to all the shareholders in the room today, the share price. Share price halved. So the company is growing, growing, growing mainly through acquisition, shareholder value getting smashed. It really does seem, Mr. Chairman, another case of empire building going badly wrong, either through poor strategy or very poor execution or a combination of both. Now let's look at the most recent acquisition of Pendal. November 2022, Perpetual rejected a $33 per share conditional bid from a Regal-led consortium. Perpetual advised shareholders and the ASX that the $33 conditional bid quite materially undervalued Perpetual, quite, from Perpetual to the ASX and the shareholders. Instead of continuing to assess and negotiate with Regal at $33 a share or maybe above, Perpetual proceeded with its overpriced share and cash bid for Pendal. I was fortunate. I was actually a Pendal shareholder. And at the Pendal extraordinary general meeting to approve the deal, I congratulated the Pendal Board on a brilliant deal for Pendal, albeit a very bad deal for Perpetual. That was meant to be, Chairman, a merger of equals, similar-sized companies. Usually, when there's a merger of equals, the takeover premium is very minor, if anything. But Perpetual paid a thumping 32% premium to Pendal's VWAP for the 30-day period to 24 August '22 based on Perpetual's share price on 24 August. A lot of the pain for shareholders has come from those two issues, the rejection of the $33 bid and proceeding with the Pendal bid. However, let's be balanced. In my opinion, there's partial redemption. In my opinion, the sale to KKR is at an attractive price. Well done to the Board, with weak shareholder value, Perpetual conducted a strategic review. In May '24, it announced the sale of Perpetual's Wealth Management and Corporate Trust businesses to KKR for $2.175 billion. Now as an order of magnitude, to put it in context, that amount is only marginally less from the $2.25 billion market cap of the whole of Perpetual today, albeit recognizing that Perpetual has some debt. As you mentioned, Chair, the KKR is an attractive multiple, 13.7x EBITDA, 16.3x EBIT. Yes, $686 million of the proceeds repay debt, and there are significant transaction costs. But the headline price is well above the general consensus of the market as to the value of those divisions. As you mentioned, Chair, the estimated cash to shareholders, $8.38 to $9.82 per share. That will evolve, as you said, with further refinement. I assume, picking up the previous questioner's point, that part of that will come back to shareholders with franked dividend given a little bit of tax that will have to be paid. Let's get to the crux of it all, and let's indicatively assume that, that deal is endorsed in due course. At the current Perpetual share price, the indicative value of the remaining Asset Management business, including cash and seed investments, will be around $1.2 billion based on the current share price. But when we adjust to notionally eliminate the cash and the seed investments held, which then gives you a value on the funds management part of that business, the asset management business, the value based on the market today, reduces to significantly under $1 billion, which is, in my opinion, very low. I'll come back to that briefly. Yes, as you've said today, Chair, it's been announced before, poor shareholder value, it has consequences. Board and management renewal, Rob Adams has been replaced by Bernard Reilly. And Chair, you yourself are stepping down in 2025 and independent directors, Ian Hammond and Nancy Fox is stepping down today. But let's come to the crux of it all, which is when I lead to my questions, Chair. Why is Perpetual rated so poorly today? Asset Management's $222 billion as at this morning. With an implied value of under $1 billion for the residual asset management business, excluding cash and seed, this represents a paltry, paltry value of below 0.5% per dollar of asset under management. Now it's interesting, Chair, that this sub-$1 billion valuation implied compares with the independent expert, Kroll, who opined on the merger between perpetual and Pendal. They ascribe in their formal report an equity value to the Pendal asset management business alone of $1.68 billion to $1.95 billion. So we now have this absurd situation where the Board went ahead with the Pendal deal, the expert put its assessment on the value of Pendal, and yet the combined business is now having an implied value of sub-$1 billion. In contrast to Perpetual rated at below 0.5% of asset management, Geoff -- there he is. He's back, Geoff Wilson. I doubt Geoff Wilson would sell he's over $5 billion of FUM for less than $500 million or 10% of FUM. Mr. Wilson has high fees and sticky dollars. But at $5 billion of FUM or a bit more now, I think, Geoff.

David, that's a bit personal.

No, you're here.

Can you get to the question?

Geoff's very sensitive now. He's shy and retiring. But at $5 billion of FUM versus $222 million for Perpetual, Wilson is [ $1 million ], but the values are not all that far apart. If we look at Regal Platinum, Magellan and most peers, the value of their FUM is dramatically higher than the implied value for Perpetual's FUM. Similarly, if we look at estimated EBITDA and EBIT multiples based on current share price, Perpetual's implied value is well, well below most of its peers. I'll cut to the question, I believe the sale to KKR is at an attractive price, so well done to the Board and its advisers. But Mr. Chairman, whilst rejecting the 2022 Regal bid at $33 and advising the market that, that materially undervalued Perpetual, was that a mistake? And my second question is why is the current implied value of Perpetual's residual stand-alone asset management business at sub-$1 billion when you've got approximately $222 billion of assets under management, which gives you an implied value of well under 0.5% for your asset under management?

Thank you, and thank you, first, for taking shareholders through where we've come from. And in terms of the questions, if I cut to the chase as well, I mean in terms of what the share price may have been 10 years ago and so on and the underlying pressures I referred to in my speech, I won't go over that, but why is PPT rated so poorly at the moment? That is really an issue for the market because we similarly work out and look at the value of those businesses. And what I said in presenting was that the next period leading to that vote on the scheme, which you support, the underlying value of the Asset Management business does look undervalued in terms of looking at that. And we, as a Board, management are really trying to get shareholders through that noise, through what's going on in the market to really look at how solid this business is going forward. and really Bernard's task, as he's outlined, is really to demonstrate that this footprint that is being put in place for the asset management business, the use of shareholder funds for the acquisitions is long term -- medium- to long term and to provide the return that you're searching for. And I think in your own mind and your own analysis, you have a view as to what could further influence that price to rise. And it's not -- it's really the secondary market that sorts this out. But I've no doubt, as we're clearer on the value and the -- what we're doing with these businesses and integrating them, reducing costs that, that will feed through ultimately -- and not ultimately but will feed through back to the share price. On the Regal bid and that we were clear at the time when we analyzed that bit on the information we have, that was undervalued at that time. Markets have moved, as you know, significantly since then. We're going back to '23. And the industry itself is going through rerating and so on. So -- and we had other execution risks associated with that bid. So history is interesting. We can all, with hindsight, point up issues. What's fundamental to us at the moment is that we've recognized that the share price has to improve. We've recognized that we need to unlock value from the businesses that are not being reflected in that share price. But most fundamentally, we are working on the asset management business in terms of where it's at, its restructure, its cost base, and we think the market will start to see what you think is the position as well that these businesses are undervalued at this point in time. And we -- as I said, we encourage shareholders to take the medium to longer-term view. As we said, we had funds outflows at 30 June. At 30 September, we had a positive inflow. So these things will fluctuate. Markets will knock it about. But basically, the underlying strength, the footprint, the brands, the professionalism of the asset management business are first rate. Next question.

Chairman, I'd like to introduce Ms. Rita Mazalevskis.

I did ask if I can go first. Before my question Board, I just want to ask in regard to the previous shareholder question about Star Entertainment. Is wealth management not under the Perpetual Limited structure?

I'm sorry. Could you explain that?

Well, he asked about the Star Entertainment debacle, given their AML CTF breaches and risk in governance failures, the previous shareholder that was up here. The gentleman just here. And you didn't want to comment because you said that you don't have any -- the wealth management group makes their own decisions. So they're not incorporated in Perpetual Limited's risk assessment?

The management of money and the investment in companies with asset management rests with the portfolio managers that run those businesses, whether it's Pendal, whether it's Australian Equities, Perpetual or overseas. They make the decisions on what to invest in and how they run that investment. The Board is not involved in relation to those. The remuneration of money that they make in respect to that or losses and gains does feed its way back through the overall Perpetual results. The questioner was really trying to highlight that we -- that, that group that's running that particular investment has made some decisions, which he feels they should reexamine and I said I would pass that on.

So does that mean that Perpetual undertakes risk assessments of their investments into the companies before investing?

The management of risk and investment is done by the portfolio managers, and they have a system of being able to look at their positions and how they enter, they exit. It's a very -- not complicated, but it's a well-trodden path on how they assess risk and investment, how they make investments and how they then withdraw investments. And the positions they take with proxy, we're using proxies voting, discussions with management. That's all in their remit to make money for perpetual and the investors.

Yes, because I do know from our media reporting that Star had, had a second inquiry because they failed to implement actions and recommendations from the first one and drag their feet. So they have ongoing value. So it's a great concern to have such a huge investment in such a corporation. So anyway, that was on the back end of that gentleman's question. I'll just ask this question. Okay. As highlighted today, shareholders are not happy with a record low share price, which should be around $40 to $50. Multiple media reports point...

Why not higher?

Sorry?

Why not higher?

Well, higher, is that a promise?

That was a joke.

You're on record for saying that. So that's awesome. Everyone better go out and buy shares.

We need objectives.

Whilst they're really low. They'll get more for their -- dollar, for their buck. Anyway, multiple media reports point to the institutions being ropable at the failures in getting strategy and execution right. You have failed at the micro level in my matter and at the macro level for shareholders and institutions. And just briefly, I hope you'll bear with me. As you are aware and I'm sure the Board is aware, and this is now my sixth AGM because I have a matter with Perpetual, the CEO, Mr. Adams, offered and pushed for mediation on the 12th of March 2020. I accepted on the 29th of May 2020. And on the third of May 2023, Ms. [ Superina ], the client advocacy said, as we approach the fourth anniversary of becoming aware of your dispute, we can't proceed with an approach that provides us with anything less then a full exoneration for all possible wrongdoing or an opportunity to properly remediate any wrongdoing that we may have caused. We believe that anything less will ultimately prove to be unacceptable to you and will leave Perpetual exposed to further claims. Chairman, I've been communicating you now -- with you now recently for 78 days.

Agreed. Come to the question because...

I am. I'm nearly there. Please assort me the same respect as other shareholders.

I have done that for 4 years.

I'm not -- well, and I have to keep coming back because I'm not happy with your poor governance and lack of accountability. So my question is now that Mr. Adams has gone from the role and because I have no trust and faith in you because of your failures with your accountability and governance in my matter, will the new CEO, Mr. Reilly, Bern, agree to meet with me after the meeting because I've come from Perth, like I do every year, with good faith to proceed without further delay or obfuscation to a mediation or to finally resolve my serious dispute with Perpetual because I will be here year after year, and I'm sure shareholders don't want to see me here every single year about my matter. In 2019, when I first raised it, you had a lovely shareholder, a gentleman, Dr. -- I forget his name. I apologize. And there were four complaints that were raised in the AGM. And he said to you, fix them. We're now in 2024, and I'm here again at my sixth AGM.

Thank you. And I won't ask Bern to comment on that because there's a history here.

Well, I ask for a meeting with him as CEO.

Well, I'm answering the question. Thank you. We really have looked at your matter. It's been looked at within Perpetual. It's been looked at by Rob Adams. I've gone through it. We have advised you that we cannot agree with you. We do not think there's any claim there that relates to us. We've been very respectful. We've outlined our reasons. But there's a point at which we need to close it out. I intend to close it out. And I've sent you correspondence on a number of occasions now, including last night indicating that I would close it out and have. And I am sorry. I'm sorry we can't help you. On other matters that have been raised at this meeting, I think as Chairman, I have a pretty good track record that I resolved a lot of those issues that have come up and have spent a lot of time on those and sometimes to the irritation of shareholders who want to ask other questions. So I feel quite comfortable and I sincerely apologize and will not be agreeing to take the matter further. By all means, you might want to write to Bern, but my advice to Bern will be he's got to really look at the whole things and form his own view as to whether he would take anything on. So thank you, and I will not take further questions.

I appreciate that you've helped a lot of other complaints. But Perpetual has a -- has not investigated fully. It's inconclusive as I have documented, and there's been foul use in the process.

I'm closing. Thank you.

Yes, to hide the coverups of what Perpetual has done.

Please sit down. Please sit down.

Could I please request a meeting with Mr. Bern Reilly.

No, I have closed the matter.

I'm a shareholder and I'm an owner of the business.

I've closed the matter down.

That's okay. You might have but I'd like speak to Mr. Reilly. Please.

He's not chairing the meeting. I am.

I know but I'm putting it to him like I did to Mr. Adams at the previous AGMs.

Next question please. I think there are a number of shareholders, who do not want to shut this down.

I have put it on record. So...

Thank you. Thank you. Next question.

Mr. Chairman, I'd like to introduce Mr. [ William Prentice ].

I just want to say I'm a shareholder, but thankfully, only a small shareholder. So that makes me sort of happy probably compared to -- I'm relatively lucky. I came here last year, and I think you will hear Mr. Adams, I don't know whether you remember me or not.

I do.

Okay. And I guess I could summarize that meeting as -- I won't go into all the details like one of the previous speakers, but we're on the right track. Things are going to be wonderful. Things will be fine. And our share price was down, and I asked you whether you'd received any takeover offers because -- and you said, well, we'd let you know if we did. But my surprise was because you were so exuberant in the -- what was going to happen that you'd probably -- someone else would recognize it. Maybe they have, I don't know. This year, I think it's sort of somewhat similar in that things are looking up again. Now I'm not the brightest of fellows. I know that. And I felt pretty good after the last meeting, but I didn't buy any more shares, but I didn't sell them either. So I'm not the smartest of people, but not the dumbest, I guess. But my sort of answer is just a couple of things that things haven't worked out really, and I think you're the first to acknowledge that. And how is the company being subject to any class actions for shareholders that are aggrieved. I -- personally, I felt I suppose you said everything in good faith, but now I sort of have to come to the conclusion that, well, maybe you really weren't purposely misleading, but it just sort of didn't work out. So I guess the crux of the question, are there any class actions that you are aware of against this company in relation to.

Absolutely not. Absolutely not. That's that -- no, no, no, let's just track back a bit. When you say in terms of exuberance -- and we were very clear that we were going through a transition, as I've said, in moving to the -- with the asset management business and the work that we're doing. Clearly, we are disappointed with the share prices as one of the earlier questioners pointed out that trying to understand why the market is not rating these businesses higher. We're continuing to work as we did last year to get the market to better understand the value of these businesses. And we recognize that share price will move when you demonstrate forward earnings and sustainability and so on. And we're working hard to do that. Companies will go through transformation. It's not defensive. It's just a way that markets work. There will be times where you need to transform a company. And there's a mismatch between short-term results against the longer term, always difficult issues for boards to judge. And this 5 year for Perpetual has been with businesses that looked on their face to be performing well with the asset prices at the time but had in-built pressures in terms of needing investment and needing diversification, as I had mentioned in my speech. That's what we've been doing. Last year was an update on that. It wasn't being exuberant. And it's certainly not exuberant this year. This year is a further update, and we -- if you haven't, we ask you to bear with us and hold your shares and just see how things transform. And you've heard the support for the scheme. We want people and shareholders to have a look at the value of that in the short term, whether they will go with it. And keep an open mind for the moment in relation to the future of the asset management businesses, which, as I said, have a tremendous footprint. This is a very significant asset management company whether we stay together as three businesses or whether we move to just the asset management company.

Can I just ask a follow-up question? Mr. Chairman.

Please.

Okay. Recently, and probably other shareholders did too, I don't think it was a scam e-mail, but it came from Perpetual. And I just recently got it. I wondered why they sent it to me being such a minor shareholder to tell you the truth. And it asked me to fill out a questionnaire on my opinion on the proposal the [ KKK], proposal has split up of the businesses and so forth. And it sort of asked questions like -- was basically do you think that sum of the parts is worth more than the whole. That was the gist of it, might be 20 questions or something like that. And of course, I have no idea. And -- but I'm just wondering if you could give an idea. I think you guys must feel that the sum of the parts is worth more than the whole and at this stage, anyway, and whether you could give some idea of whether at the moment, based on the share price of $20, it will be effectively worth $25. If you know what I mean, to us, when we get the different payouts and so forth. And I should imagine you've done models on that and so forth, so just if you have got any comments on that?

As you would expect, I can't do forward projections on our share price and nor would it be sensible for a Chairman to do that. But an indicator of separation and value is the actual KKR proposal, as we heard earlier said from me. It's a $2.175 billion offer for shareholders to consider. And then when you look at the total market cap for Perpetual, you do, as the previous questioner said, get a feel that the asset management arm is not being valued properly. And what we would like shareholders to do over the next few months, and we will provide further guidance on this with the scheme booklet where we will need to go into much more detail about the Asset Management businesses and their performance. So we think an indicative price is the $2.175 billion. The further work that's going on in the asset management business should give shareholders a feel for what the worth of that business is going to be longer term when they come to vote on the scheme. And I really can't speculate beyond that in terms of what that share price might be. Like you, clearly, we want it to be higher, but that's a matter for the market, and the market has got all its own vagaries and tactics and so on.

I know. I'm not really asking you to forecast the market. I'm just asking the question that at the current prices, what sort of value would you put on the assets as they are...

I think you're asking the same question in a different way. My answer is not any different.

I think you get $20 now.

I think, thank you for the comment. Thank you for the comment. Thank you. I appreciate it. But I think we have to respect how governance works as well.

Chairman, I'd like to introduce Mr. Charlie Kingston.

Just I was going to ask a question on it, but maybe just a comment in response to that last comment from you, Mr. Chair, that I know you can't forecast the share price, but you did, as a Board, say at $33, the shares were materially undervalued. So it's a bit underwhelming that you won't give us any sort of sense as to what you think the asset management business is worth today given we're about to vote on the KKR deal. We have a vote, and we didn't actually have a vote on the Regal proposal of $33 because you as a Board said at $33, a little undervalued. So I think it's pretty underwhelming. But can you give us any sense of what you as a Board today? And since that time, you bought Pendal, which presumably you thought was a good deal. It's going to add value to shareholders. Today, the market is saying it's worth $20. So again, just maybe as a comment, it is a bit underwhelming that you won't give us any sense of what you, as a Board, think the remaining business is going to be worth and you're just putting it back on to shareholders. But that's just a comment. And then just a question, when you did put together that acquisition of Pendal, the -- in the presentation, you said the combined NPAT of the group or underlying NPAT was going to be around about $450 million, roughly $350 million from the asset management, $100 million from Perpetual, $250 million from Pendal. Since then, you've ripped out, I think -- not ripped out, but taken some costs out. You've made some synergies, I think, of $80 million, of which most was reflected in the FY '24 results. But the FY '24 results, you actually delivered $200 million of underlying profit from the Asset Management division, which compares to $350 million at the time of the merger, add some synergy which, to me, unless my maths are wrong or I'm misallocating some profits, it should have been earning well over $400 million when you include the synergies you extracted since that deal. So just a question, I mean, FUM's relatively stable. Markets have gone through the roof. Where have those profits disappeared to?

I don't think it's an issue. I'll ask Chris Green to comment more specifically on some of the numbers you've quoted. I mean, since that time, clearly, there were significant movements in the markets and in relation to our flows picture, which would have dampened the forward estimate of flows, which in turn would have impacted on the profit. But I'll ask Chris to comment more specifically on the question.

Thanks for the question. It was profit before tax, I think, was the number, around $450 million and has come off. That was a pro number based on our assumptions at the time we acquired the deal. And clearly from the impairment we put through this year, the assumptions around the growth of some of Pendal assets were not reached. And so the impairment is a reflection of some of the businesses not performing the way we expected at the time we did the deal. That's ultimately what's driven the PBT down from the $450 million number that you mentioned.

I think it's correct that it's roughly half of what you thought you just delivered, just a [indiscernible] of $200 million and it was supposed to deliver over $400 million with the synergies included.

No, it's not. I think it's around $350 million PBT. So...

Synergies.

Yes. But it is lower than expected at the time we get the deal.

Thank you. Any other questions in the room? Yes.

Chairman, I would like to introduce Mr. Michael Sanderson.

Am I close enough? I've got four issues I'd like raise. I always get into 2, 2, but time march is on. The first two relate to conflict resolution and equity. At last year's AGM, I highlighted the issues of concern that financial service provide consumers had with the Australian Financial Complaints Authority. I'd like to acknowledge that post that AGM, you, Mr. D'Aloisio, took the trouble to write to me about AFCA. And I trust that the additional information that I have supplied since has illustrated that not all is well at AFCA. AFCA is a private company limited by guarantee owned by its members and continues to act as the FSP gatekeepers. There is no merits review of a dodgy AFCA determination outside the courts. The courts are unaffordable and out of reach to consumers. In addition, a recent Senate inquiry found that the peak regulator AISC, which I'm quite sure you're familiar with, was not fit for -- it was not fit for purpose, ineffectual and dysfunctional. I can also add to the mix and the net industry captured Minister for financial services and by extension, the federal government question, would Perpetual acknowledge the inherited equity consumer experience in the political, regulatory, judicial and financial sectors, and does Perpetual have a solution?

I think -- as I think I said in the correspondence, this is not an issue for Perpetual in terms of its policy while I think you're progressing it in a total respect your ability to do that Perpetual is not, at this point, going to engage, it has other priorities and things to do, and we will not be engaging on that issue. But we'll keep it under review. We're not wishing -- not to wish you any luck in pursuing the issues you have. We're just not in a position to assist you.

No, no, I accept that. And the additional information was for your purpose. And I said you made a statement in relation to AFCA and I'll come back to information. You look at this. You're wrong. There are issues. And probably the major issue is the lack of the -- there is no merit review of the determination, which really leaves a consumer stranded. A related issue and as I'm not one to highlight an issue without offering a solution, I don't trust the banks, self-serving and the self-serving agents or the Australian federal government to craft a meaningful solution that serves a good public purpose. If you need an example of systemic implication, go no further than the bank-approved claims, Royal Commission, which investigated 22 -- 27 case studies from over 10,000 submissions. 5 years later, nothing has changed. The AFCA CEO warned recently and I quote, "The volume of complaints escalated to AFCA have been increasing at an unsustainable rate." That was made very recently. I've provided the meeting with a one-page description of a proposed financial services law for us and [ FSLF ] would establish a quality of arms, in the event that your FSP uses the course to persue your customer and [ FSLS ] would shorten the legal process, make it more efficient, and rein in the excessive fees of greedy big law firms are truly independent, and I put the word truly there quite deliberately, would keep banks, the legal profession, the parliament and the regulator's honest, fit for purpose and so much more. Would perpetual support a truly independent financial services law force? And if not, why not?

Well, I think these are big questions and policy issues. And at this stage, we're not minded to engage in those. But we'll keep it under review. And again, your direct -- and I'm sure you are going to the AGMs of the various banks and so on, and it's really what sort of response you get from them as well is obviously going to be relevant to how you take the issue forward. But from our end, we've not really got anything to add or to engage in.

But you're not inherently opposed to it either. Well, I'll put it this way. I'll frame it this way. I had an FSLS in place, I don't think you'll be having the issues with Ms. Rita Mazalevskis. Because you would have an independent body that would be able to look at that issue. You're all coming in from the perspective of strength, big person against a little person that has an entrenched position, whether it be right or wrong. I'm not casting judgment here. I'm not saying you're right or Rita is right. But there is no equitable platform for Rita to say, "I've been done bad."

I think we'll keep an open mind, but we're not engaging at this point.

Okay. The third one relates to the RBA. perpetual will be aware of the recent reserve bank review that recommended the repeal of Section 11 and Section 36 of the RBA Act. Section 11 sets out the mechanism under which differences of opinion between the government and the RBA Board have on monetary policy can be resolved. Section 36 allows the RBA to guide private banks on how much they send to different sectors of the economy. Does Perpetual support the repeal of S11 and S36? If yes, could Perpetual offer an explanation as to what reality it will be in a good public purpose to repeal these two?

I think the RBA and its workings are way beyond a little old Perpetual. I think, again, I'll note your requests, and we'll look at it. But at this stage, we would not be seeking to engage with government or the RBA in relation to these very complex policy issues, public policy issues that is for the politicians to sort out rather than for Perpetual.

I'm a lowly ex-primary producer as someone that makes something. And I've got my head around this. I don't accept that you don't know. My final one, you would like this one. This goes to regulatory capture and revolving door. Countless consumers have attempted to contact the Minister for Financial Services, Stephen Jones, to highlight the many concerns they have with the financial sector and the net bankers gatekeeper, AFCA. It would seem he is too busy swarming around with the top end of town to meet lowly consumers. [ Michael Rodan ] wrote in the financial review, Stephen Jones is out of his depth and said, across -- and the...

I don't think this is relevant to this meeting. I think it is -- it's something you might want to talk to the media.

[ Michael Rodan ] wrote -- he said across an otherwise competent front bench, [ Albanese ] government, Assistant Treasurer, Stephen Jones, stands out like dogs b****. In the 6 months since he took charge of the ministry, the member for Whitland has chewed the furniture, rubbed his bum on the carpet, co**** his leg over parliamentary college and his finance...

Enough. Mr. Sanderson, enough. Thank you.

That is not my opinion.

We'll leave that as a comment. That is not relevant to this meeting. Thank you. Thank you. Please. Look, I appreciate the interchange with you each year, but this one has gone a little bit haywire. But thank you. Next question, please.

Chairman, I would like to introduce Mr. [ Ron McPhail ].

I'm a shareholder, Mr. Chairman. My question won't be long and detailed like that question. It sounds like you've got a very great deal with KK (sic) KKR and we're going to come up with some very big money, but my questions is have they locked in, have you got good documentation. Is it possible for them to pull out and not go ahead with this deal? And can you just tell [indiscernible] or the contract of sale, you collect 10% deposit or something. And you've got good documentation. In other words...

We should have insisted for prepayment. Yes, there is what is what is known as a scheme implementation deed. It's a very fulsome document that regulates a contractual position between KKR and perpetual. As I said earlier, however, there are a number of conditions that need to be fulfilled. Probably the most important one of which is for our shareholders to vote in favor of it. And it's subject to -- they're not being a superior offer that emerges. And it's also subject to a very thorough review by the -- by an independent expert. So when you come to vote on it later, you'll have all the information. But to the extent that one can legally tie up a buyer and seller as you do in a contract to sale for a home or for any other asset acquisitions or dispositions, there is a very fulsome legal document in place. Okay. Next question, please.

Mr. Chairman, I'd like to introduce Mr. [ Charles Weeks ].

Mr. Chairman, Bern have mentioned that [indiscernible] management businesses were up by 3%, but inflation running at 4.6%. Doesn't that mean they've gone backwards by 1.6% in real terms?

3% for the last 3 months. 3% for the quarter. And the inflation number you're referring to is an annual inflation number.

That's right.

And so that's the growth over the last 3 months that I gave you as opposed to the growth over a 12-month period.

Right. I expect much better.

Yes. Yes.

And could you ask the company secretary, on the highlight, could you put the inflation over the last 12 months to show what the -- our result really is.

Yes, we can do that.

We can take that on notice. Thank you.

Yes. And shareholder, could you ask all meetings that all reports show what the inflation is because a lot of these highlights are often below inflation rate?

Thank you. Okay. Are we ready to move to questions online? Okay. Thank you. Company Secretary, we got questions online?

Thank you, Chairman. Yes, we do. We have two. The first question is from Mr. Craig Caulfield. I have raised model litigant principles with the Chairman over the last 3 years at AGMs. Despite the Chairman's undertaking, both verbally and in writing to respond to me, he has remained silent. Model litigant principles have been watered down at Perpetual since original inception. Model litigant principles at all the major banks and many others, including government, have adopted and published to simply provide fairness to your clients or customers in the event of a legal dispute. Can the new CEO undertake to engage with me in coming weeks to discuss genuinely upgrading Perpetual's model litigant principal undertakings.

Thank you for the question. Mr. Caulfield. The -- following last year's AGM, I actually did take that on notice and our legal team did review the model litigant arrangements that we have. And we are satisfied that what we have got in place is in line with what would be expected of a company such as Perpetual. And if need be, we can discuss that with you offline. But it's not an issue that we will revisit. We've looked at it. We've taken your comments into account, and we confirm that our model litigant policy is the one that we need.

Thank you, Chairman. The next question is from Mr. Stephen Mayne. Ahead of the voting on all resolutions today, could the Chair please comment on whether the concept of a secret ballot was applied or whether the company spent shareholder funds hiring proxy solicitors to engage with shareholders after they looked at their votes and discovered they weren't following the Board's recommendation. As a former Chairman of ASIC, does the Chair also believe that the inability of external challenging Board candidates to appoint independent scrutineers of the voting is a flaw in our system?

Thank you, Mr. Mayne. First off, let me just clarify. It's totally proper usual that leading into an AGM consulting shareholders. It's quite important indeed last year in terms of my own reelection. We sought to see what shareholders thought. That's quite -- that's perfectly proper. The proxy advisers provide their reports. In a lot of times, those reports are actually contained as good as they may be. They contain information that could be challenged, could be wrong. And it's important for us when shareholders vote that they have outside of those reports and those issues. I heard the rumors or the thing about the change in votes. That's just a nonsense. We do not do that. Certainly, what occurs is really consulting, examining and then forming, letting shareholders make up their own mind and then either vote for or against abstain or give me the -- an open vote. Perpetual is not the sort of company that would do that. On the question of secret ballot, look, that's a policy corporation matter. I don't think companies need a secret ballot. You should be able to say and speak at AGMs as we do. You should be able to be free to vote as you wish. And we should know your views, and you should know our views. So I'm not for that, but again, we'll be guided by the policymakers, if that's where they want to take companies. That's fine, but I don't think it's needed. But Stephen Mayne, you've been around a long time, and you've seen this. And you know exactly how the voting arrangements come into be and the discussions that go with the proxy advisers and clients and so on. So don't think there's a scope for change and there's absolutely no basis that Perpetual's done anything wrong in this process. And we'll go into the voting of each resolution, and we can go further into that with each resolution. Next question.

Chairman, there are no further questions online.

Web?

Chairman, there are no further questions at this time.

Thank you. Thank you, and thank you, everyone. I take it from that, that there are no questions of the auditor as well, so thank you for that. I'll now move to the first resolution, which is the remuneration report. So this is the next item of business. In accordance with Section 250R of the Corporations Act, the vote on this resolution will be advisory only and does not bind directors of the company. Excluded from the votes on resolution ones are KMPs of those that could be affected by the remuneration report. The way I propose to handle this item because, as I said earlier, we are looking at a strike here and we're humbled by the response, I'll ask Nancy to outline the Board's position and present the remuneration report. And then we'll move into questions and discussion and then a vote. And I should mention -- sorry, Nancy, before you start. As I said earlier, also, a 25% vote against triggers a first strike, then the company at the next AGM will face the shareholders again. And if there's a second strike, then the Board can be vacated and needs to be reelected. So it's a very important part of the corporate governance processes that exist. Nancy?

Thank you, Tony. Good morning. Is it still morning? I think we might be close to afternoon. As Chair of the People and Remuneration Committee, which we will call PARC, I present to you today our remuneration report for the 2024 financial year. Before I discuss the report in detail, I'd like to begin by acknowledging, as the Chairman has highlighted earlier, it is likely there will be a number of you who will vote against this report, and we will face a substantial first strike against our Remuneration Report this year. We acknowledge the feedback received on our REM outcomes from shareholders and other stakeholders. The Board appreciates the ongoing dialogue with our shareholders and key stakeholders and has considered the concerns raised through our engagement to date. And many of you that I have met with are in the room today. As a result of your feedback and to reflect the transition to a pure-play asset management business, we will be undertaking a comprehensive review of our remuneration framework to ensure it is fit for purpose in supporting our business objectives and provide greater shareholder alignment. In other words, I heard you all this morning. I hear you. Perpetual maintains a performance-driven remuneration framework, linking executive key management personnel, which we call KMP, linking their bonuses to key financial and strategic objectives. We will continue to engage with shareholders and other key stakeholders through this process. As Tony and Bernard have already highlighted, FY '24 was a significant year of organizational transformation, uncertainty and change for Perpetual with the completed integration of the Pendal Group, the strategic review and the scheme implementation deed with KKR to acquire our Corporate Trust and our wealth management businesses. This has also resulted in a significant amount of work in preparation to separate these businesses as well as create a stand-alone global asset management business. Despite these significant strategic initiatives, and I remind you, Perpetual is 138 years old, and we're trying to separate these businesses, in spite of that, our Global Asset Management business achieved continued overall growth in AUM. And as you heard earlier, as of today, we're up to $222 billion despite the net outflows we reported and the continued financial headwinds. Our Wealth Management and Corporate Trust business once again continued to deliver solid growth over the year with underlying profit before tax up 15% and 4%, respectively. We also continued to diversify our services across both of those businesses over the year, and our client engagement remains strong despite a period of significant corporate activity. And moving to the remuneration outcomes. The PARC and the Board spent considerable time this year evaluating the contribution and performance of the CEO and the other KMP. Perpetual's success relies on the quality of talent that we can attract and retain within our businesses. Our remuneration framework plays an important role in attracting, motivating and retaining our people. It is clear that FY '24 was an unprecedented year for Perpetual. In determining the arrangements, the Board weighed up the following: one, a significant program of transformation change and uncertainty; two, the work required to complete the strategic review and maximize value for shareholders through that process and in finalizing the negotiations with KKR; and lastly, we also considered the work that is now underway to successfully complete this transaction, separate our Wealth Management and Corporate Trust businesses and to prepare our global asset management business to be stand-alone with a clear strategy for future success under Bern. All of these were considered alongside our performance across our businesses, and the need to ensure stability through a significant program of transformational change and uncertainty. In particular, the announcement of the Board's strategic review created significant additional workload, challenge and uncertainty for critical roles across the business, including members of the executive KMP. To ensure the stability of the leadership team while the review was undertaken and any potential transaction affected, one-off cash retention awards and minimum variable incentive levels for FY '24 were put in place for five members of the executive KMP. This did not extend to the Group CEO and Managing Director, Rob Adams. The Board believed leadership instability at this time was a significant risk and that our duty was to implement these initiatives, which are critical to ensure stability and leadership for both employees and prospective counterparties and to execute on complex process and system changes arising from any potential transaction and subsequent separation. The Board's business judgment was that the best interest of shareholders would be served and value maximized from any potential sale by retaining the five KMP involved. The retention awards are due to be paid in December 2024, subject to each member of the KMP not having given notice of resignation or retirement, complying with all Perpetual policies and satisfactory meeting performance objectives up until the payment date. Turning to our variable incentive program separate from those retention awards. For FY '24, the Board agreed variable incentive outcomes equal to 80% of the target incentives that we set for KMP would be awarded. But in context, this was less than 46% of the maximum that they could have earned. For the CEO of Wealth Management, his outcome was actually 57% of maximum, which was agreed with him. The variable incentive awards remain subject to each executive KMP member, meeting agreed performance and risk objectives, which were reviewed by the PARC and Board as part of the year-end process. The Board do not agree to these arrangements lightly, and I really want to stress that. We have not done this in the past, but it was important for the stability of leadership. We consider the perspectives of shareholders and other stakeholders as part of this process. In the Board's view, the arrangements were necessary to provide critical stability for Perpetual in these unique circumstances. And it was a business decision to protect shareholder value as the Board's strategic review was finalized and any transaction was agreed. Now I would like to touch on the separation details for our departing CEO and Managing Director. On May 8, 2024, alongside the conclusion of the Board's strategic review, we announced that the Group CEO and Managing Director, Rob Adams, would leave the business after an orderly transition and completion of the transaction. Rob Adams served as CEO and Managing Director of the business during a period of substantial change, overseeing the transformation of the business from a largely domestic asset management business to a globally diverse multi-boutique asset manager. Rob was awarded a variable incentive equal to 80% of his target incentive, but that was limited to the cash component and what we call the unhurdled equity component, Rob was entitled to cash, unhurdled equity and hurdled equity in a normal scenario. So he received 80% in the cash, 80% in the unhurdled and [ 0 ] -- 80% in the hurdled -- excuse me, let me start over 80% for cash, 80% for unhurdled and 0 for the hurdled equity. He received no retention payment. Under the agreed separation arrangements, Rob will serve out the notice period in his contract by taking gardening leave and his entitlements follow his contractual and legal entitlements. His vested and unvested equity granted in prior years will be subject to meeting any hurdles in accordance with the terms of those grants under the relevant plans. I'd like to also make a point here. Rob received hurdled equity for 5 years, so it was hurdled against a metric of ATSR hurdle before we received it. We didn't achieve that for the 5 years, so he received none of that hurdled equity for the 5 years of those awards. And in fact, the KMP that received hurdled equity didn't receive any of them for the 5 years either because that's what shareholder alignment is all about. I'd now like to move to our incoming CEO and Managing Director. On August 21, Perpetual announced the appointment of Bernard Reilly as the new Group CEO and Managing Director of Perpetual Limited, and he started on September 2. Bernard's appointment is to head the new and separated asset management business. Leading up to the completion of the transaction, he will also carry overall duties in relation to the whole of the company. Bernard's contract terms are commensurate with the resized company going forward, post the transaction and lower than Rob Adams base remuneration and includes a change in his incentive mix to be skewed towards longer-term incentives moving away from shorter-term incentives. And what I've heard from many of you in the room is you have felt that our framework was too short term in the past. So Bern's is the first one that we have looked at. In fact, Bern's base salary is in the documentation, $300,000 less than Rob Adams. Now I'd like to touch on the changes to the Board going forward and mostly around some new committees because Tony has touched on who's leaving the Board and who is staying. We created two new committees this year in recognition of the increased oversight requirements required of the Board during a period of substantial business transformation. Those -- sorry, those two Boards committees were to assist in directing focus to key areas requesting -- requiring specific oversight. The first is the Board Integration Committee, which focused on the integration activities associated with the Pendal Group acquisition and also a Board Technology and Cybersecurity Committee. I think you'll all agree, we all need these days. With the formal integration of the Pendal Group essentially complete, the Board Integration Committee ceased on July 31 and was replaced by the Board Implementation Committee established to oversee the implementation of the transaction with KKR, which will be led by Fiona Trafford-Walker, and it includes Mona Aboelnaga Kanaan, Paul Ruiz, and Christopher Jones. No changes were made to nonexecutive director fees for FY '24 outside of the appointment of Greg Cooper as Deputy Chair. In conclusion, we recognize that FY '24 was a very challenging year of significant transformation. The Board remains confident in the long-term fundamentals and strength of our businesses and talent. We acknowledge shareholder feedback in relation to the remuneration arrangements put in place in FY '24. We will ensure a thorough review is undertaken to ensure these arrangements balance the shareholder experience, while supporting the business to execute on its strategic ambitions. Finally, in accordance with the Perpetual Board rotation policy, where we serve a maximum of 9 years, today, I'll be retiring from the Perpetual Board and as Chair of the PARC. Fiona Trafford-Walker will assume the role of Chair of the committee and will lead the review process to ensure we continue to meet shareholder interests and their frameworks, policies align with the objectives of the business going forward. I'd like to thank my fellow members of the Board, management and our shareholders for their support, leadership and guidance during my time at Perpetual. Thank you.

Thank you, Nancy. If you could please stay at the lectern. We start with pre-submitted questions, Sylvie, Company Secretary.

Thank you, Chairman. The first question is from [ Scrammable PTY Limited ]. Why is it not mandatory that all directors own shares in the company paid for with their own funds to align with all shareholders, maybe $100,000 each minimum? This would ensure that they have the best interest at heart as they would incur pain with lousy decisions for the business.

Thank you, Sylvie. We actually are required to hold shares. I mean the Board does recognize the importance of us basically having shareholder alignment. Our constitution requires that all directors buy 500 shares before they join the Board, and the constitution requires us to have 1,000 shares each. That said, as a Board, we seek to own shares equal to what our 1-year fee would be, which -- and we pay for it with our own money. I don't know what that question meant. I don't borrow the money to do that. And we pay for it with our own money. The issue that we have when you look through our -- how much each director has is all of the shareholders that were in a position to own their 1,000 shares, and I'll explain that in a minute, we will comply with that. The shareholders own quite a bit more. But because of the acquisitions, and the strategic review and the bidding that was going on, there were a number of blackout periods over the last 2 years. And so it was difficult for directors to actually purchase shares during that -- those periods. So that's why you see some anomalies. I don't know if there's anything else you want to add to that, Chair. Some directors also have investments in other Perpetual product or our clients of wealth management. So we are very aligned with the company.

I can add. As Chair, I do monitor the skin in -- so-called skin in the game directors, which is, as you say, important, and just on -- just did a valuation actually overnight. In terms of directors in total at the moment have about 1.5 million, the nine directors leaving out the CEO, but in the other funds, they have $4.7 million, which totaled $6.2 million. So there's an average of over $600,000 a director in terms of actual pointable skin in the game. In addition to that, a number of us also use the discretionary portfolio management in wealth management, and so we're exposed significantly in relation to the wealth business. So I'm -- as Chair, I am comfortable that we do have the skin in the game that's necessary here like you. I'd like to see it increase. Like you, I don't like the fact that we acquire shares when there were higher than where they are today, but we're working on that. And when the blackout periods, I think, reduce, I think you will find that the directors will increase their holdings.

Thank you, Tony.

Next question.

Thank you, Chairman. The second question is from [ Travigate PTY Limited ]. Why is the value and dividend relating to our Perpetual holdings moving down while Robert Adams' remuneration is moving up?

Thank you, Sylvie. We empathize and we're shareholders as well given the recent share performance. And that's why we set the motion of the strategic review to unlock the value on your behalf. I'd like to make a couple of points to add to what I said in my speech. Rob Adams has not received an increase in his fixed pay in his entire tenure at Perpetual. So that's 5, 6 years top of my head. He hasn't received any vesting of his hurdled equity for the 5 years, going to my point of shareholder alignment. We didn't hit the metrics that we had on those shares, so he did not receive them. For his last year, he'll only receive cash on unhurdled equity. He received 0 for his hurdled equity award for FY '24. And if I could maybe make it really simple. Rob's compensation this year is lower than it was in 2023. So we've put in place all of the measurements that we can so that we're all sharing the pain as CEO and KMPs should in this particular case.

Thank you. Okay. We move -- any others?

No, Chairman.

With then to questions from -- in person from the floor here. Then we'll do online and then the web phone. So can we take questions from the floor, please?

Chairman, a question from Mr. [ Charlie Kingston ].

Yes. I suppose you've sort of commented on a few of my questions, but I don't want to labor on the point, but you've said that management are strongly aligned as is the Board. However, just, again, if we go back to 2019, when CEO, Rob Adams, I think that was his first full year, the underlying highly subjective earnings per share was around about $2.46. This year, it was $1.79, fall over 25%. Dividends have fallen from $2.50 to $1.18, a fall of 50% -- over 50% and as has been commented on, these shares have also fallen over 50%. So shareholders have been torched, how they held over that period. Yet as it has been commented, I'm glad Rob is not getting a retention payment given he is leaving. That would be a bit strange if that was the case. But I think he's received roughly 500,000 short-term bonuses almost every year. There have been some big bonuses paid, albeit not the maximum, but given shareholders have lost over half their money over that period to which the Board and the CEO, outgoing CEO have received significant bonuses, I just can't quite understand that the owners of the business had such a bad outcome and you're suggesting that they are aligned. So any further comments please?

I think most of the comments have been made at this point. I want to clarify something though, on the retention payments, those which are determined in December 2023. And that's when we launched the strategic review, we did not know who would be leaving the business at that stage. So hence, my comment, which might sound ridiculous to you about the retention payment. At the time, we did not know that Rob would be leaving the business, so we made the decision at that time. I think I've gone through what we've done with our payments. And I think the fact that the Board recognized this and launched the strategic review to actually try to maximize the value to correct the situation is the only other response I have for you. Thank you.

I think I'd simply add that you've really got to look at the total picture in that I understand tide of the share price and what's happened. And the whole management team has had the consequence of that in terms of their long-term incentives, including Rob. But when you look at that and look at the culture of the place and the hard work and the things they are doing, you can't just ignore that as shareholders because you need -- we need good people to be really focused on delivering results and delivering in the future. They may not -- from time to time, it happens. Companies go through these periods. But the important thing for the Board is that it maintains a very strong management team and makes changes when they need to be made. So I just ask shareholders to take a broader picture when it comes to looking at remuneration. We do not have a system in Australia that simply says there's no pay unless shares go up and then you get paid. That's a big change, and that's not how Perpetual rewards its executives.

Okay. But the big picture is over 6 years. The shares have fallen over 50%. So as shareholders, that's all we can hang on to on dividends and they've also halved, so that's all that's relevant. But just a second one, a quick one, Mr. Chair, given you are leaving and you've already touched on it that when the window opens, you're going to be buying shares, but you do receive a salary. I think it's $340,000 a year. You've got -- I'm not sure how many years you've been at Perpetual, but that's a nice salary, clearly, but you're also own 9,000 shares.

I can assure you I've got a huge exposure with Perpetual in shares or units and in other portfolio investments. I propose to remain a strong supporter of Perpetual, whether I'm in this role or not. I can assure you of that whether that has an impact on anyone, that's another issue. But I can tell you, I have a lot of faith in this company. I have faith in this management and I have faith that they'll get through this and deliver really good results for shareholders.

I would add that it's a very different proposition to be a unitholder because a lot of your funds have done phenomenally well, but the share price of Perpetual has been horrendous. I'm also a unitholder and those units have done very well.

But there's exposure to Perpetual with other funds. You're aware of how complex these things are.

No, no, it's not. But just a quick question, the $340,000 salary relative to your 9,000 shares, roughly $180,000 at the closing price today given you are leaving. Can I be safe to assume that when the window does open and post your departure, you're going to be absolutely hovering up shares at $20, given you did reject that bit at 33%. Is that fair assumption?

I'm not sure that I can without legal advice to answer that question, right? But I remain a strong supporter. I actually, with the window has been closed, I wasn't able to top up as the share price moves because initially, I did have I think, over 400,000, 450,000 in shares. And the -- as you would expect, the Chairman's the one that's the most closed in terms of being able to trade in any given period. When I'm free of that, I assure you I'll have a look at it. And as I say, I remain a strong supporter of this company, and that would indicate to you that I do have a view on what I'll do post retirement. And I'll come to next year's AGM. Next question, please.

Chairman, a question from Mr. [ Charles Weeks ].

Charles?

Mr. Chairman, I do not have a legal background or accountancy background. I find in 10 to 20 pages of AGMs related to remuneration so frustrating. Why can't they just be offered a reasonable pay, and if they don't perform, it's up to the Board to ask them to stand down?

My strong advice is to ring Jim [ Chalmers] and talk to them about that. I have not seen -- I'm a former lawyer in the sense of I haven't practiced for a long time. And I see they have the lawyers try and grapple with this or how management tries to grapple. We have really complicated remuneration arrangements, which have been driven over a period of time, frustrates us, frustrates the market. And it is time. I agree with you. There is one issue that probably at this time that it's got to be simplified for shareholders. But more fundamentally, it's got to be simplified for the executives as well. They need to be clearer on what will vest, what won't, what they need to do. So I share the thought, but we have a system, and that's where we are.

Sure, it's up to the Board to ask them to stand down if they're not performing.

Agreed. Next question.

Chairman, a question from Ms. Rita Mazalevskis.

Now this is not a way of coming back on your matter.

Are we on remuneration?

Yes, we are.

Sorry, Nancy, before I ask the question, can I just get clarity in regards to the retention bonus. Sorry, let me find it -- for the five people. There's one that concerns me, which really stands out for Mr. Smith, which says his retention award is $819,000 and which is much greater than his cash salary, $650,000. Why is that?

So I'm not sure if that number is correct, but it is...

It's in the annual report actually.

Actually, I think it's higher than that. The retention amount was $1.5 million. Let me just -- your question stands, $1.5 million. So Mr. Smith heads up our Wealth Management division. And at the time that we announced the review, the strategic review, we had a concern because the way wealth management works is you have a head of a business and then you have many wealth managers, and they manage funds. It is very easy if somebody leaves that business to do what's called, say, a lift out, where they take a whole group of people and the funds are not very sticky, right? You can take your money just like you can out of a bank, right, and take it to another house to manage. So we were very concerned that we needed to keep Mark because there was a lot of movement in the market. If you go back and look at the papers in November, December '23, you'll see there was a lot of movement in the wealth management industry. We were looking to perhaps sell that business, and we wanted to get the maximum value for it. Mark has been running that business for 12 years. He was the best person to stand in front of all of those prospective bidders and talk about the value of that business and the opportunities there. And I think the proof is sort of in the pudding that we got $2.175 billion for those assets by having the person who had run that business and develop that business actually promote it and sell it on our behalf. So I can't tell you that we would have gotten less if he weren't there, but because the result was so much higher than we thought and the Board's judgment, we thought it was very important to keep him there. And the Head of Wealth Management at that time, that position was very competitive in the market, and we needed stability, and we were well aware of a number of executive search firms and what have you that we're looking to pull out some of our key management personnel when we announced that we were doing this review. So that's why Mark's number is the highest because we saw that business as the highest risk. If you want to go down the next person on that list, Richard McCarthy, he ran the Corporate Trust business, which is the second business that we also sold.

It's a lot lower though.

It's a lot lower. He's sitting in the room. I hope he doesn't feel that bad. It's in the annual report. Yes. So it is lower. And part of the reason for that, not that Richard is any less important. He's been with Perpetual for 17 years. He's been head of that business for 5 years. But the Corporate Trust business is a bit, we use the term stickier. It's very hard to take your whole trust account out and move it very, very quickly. And so what's important in the Corporate Trust business is holding on to the talent, the personnel, the people who run your trusts. And so we decided that was the value that we would offer to Richard and his retention to make sure that we kept him in that role. The other three people are in support functions and there's smaller amounts. But most of those people were what I would call double hatting during the strategic review. They were trying to run finance and risk and IT. And at the same time, over here, they were trying to work with six proposed -- six bidders who are looking at the assets, right, and working out a plan for how we separate them. But those numbers are smaller because they're more on the operational parts of the business. It was not a decision we took lightly, but we thought it was very important to get the maximum value to have the right people presenting to the bidders in the situation.

Sorry, when was that decision made?

December 2023.

So it couldn't have been prepared for the previous AGM, all foreseen?

Previous AGM was...

For shareholders?

October, it was before that. We didn't announce the strategic review until December. So I couldn't flag it for you at that time. Nor did I understand, frankly, what would be required to keep those key people in place.

Just with my actual question. I think a couple of shareholders have touched on it. But just because in explaining, no disregard to you, but just the explanation of remuneration and lingo, people get lost because they don't understand. Perpetual, at the time, I wrote, Perpetual intends on paying significant bonuses to the recent CEO, Mr. Adams, and senior managers with no justification. Sorry, this is also reported in the IFR, albeit with problematic pay practices against company performance, shareholder returns and market standards. In the payment to Mr. Adams on his departure from the CEO role, he was awarded 46% of his maximum bonus, as you mentioned, and paid $1.4 million in short-term incentives, up 46% from last year. Noted by the Institutional Shareholder Services, ISS, this was materially misaligned with the company's performance. ISS also notes Perpetual's Board has disregarded performance benchmarks outlined -- which are outlined in the annual report, when it came to handing out bonuses as the large majority of financial and nonfinancial performance measures were disclosed to have been below plan. So the question is, and then -- sorry, before the question. In all of that, Perpetual shareholders [indiscernible] $547 million hit due to the Pendal payout to investors who exited. And so the question is what is the purpose of Perpetual's Remuneration Committee, which, minus it and is up for reelection, when Perpetual's Board has known problematic pay practices.

Okay. Let me try to take that one.

As I said, this was in the IFR.

Yes, it doesn't mean it's true, right?

Yes. Well, that's why I'm asking. Yes.

Sorry, with due respect to whoever wrote that, in case he's sitting in the room. So let me back up. So what that comment was about how we had a, what we call a balanced scorecard. We set a scorecard at the beginning of the year. And we have metrics and then we look at how we go against those metrics, right? So to give the right of their do, that scorecard was set in July 2023. So we had no idea what the year going forward was going to entail, right? So we did review the scorecard. It's in your annual report and your financial statements and you can see how we measure up against them. I think we hit about 66% of what they were. But what we took into consideration was in December, we announced the strategic review. And so those 5 people who we spoke about and Rob Adams were really double hatting. So they were running their businesses. And as we mentioned, those 3 businesses did very well over the course of the year despite all the noise around it. And at the same time, they were meeting with all these prospective bidders. Sometimes we have 1,000 questions a week from those bidders that had to be answered, right? So they were doing that at the same time and then they got the result, which came out in May '24. So many of those people were chasing, if you will, that scorecard and what they had to deliver amongst a lot of noise that came out in the newspaper and what have you. And then on top of that, they were fronting for the company and trying to get this great result, which we think that we have arrived at. So it's perhaps a little misleading just to look at the scorecard, and I tried in my letter to shareholders that's in those papers to explain that as well that we had other criteria. But if we also just want to look at Rob for a moment. On Rob, this was also by the end of the year, we determined that he was indeed leaving. So this review that number you put out there, the $1.2 million, that's not really correct. He received a cash payment and then what we called hurdled equity. He does not receive that until 2 years and then after 2 years, another 2 years, it vests over time, right?

So what's that total?

It's about $800,000, I believe, I'm rounding here. Somebody correct me.

$880,000.

$880,000, thank you. $880,000. So that's in shares that he will receive over time, right? So the cash component is all he received, and I think that number is $500,000 -- $520,000, sorry. Had a lot of numbers in my mind, $520,000. So that is what he has received right now. And the other thing that I just want to speak honestly, we were also working on a separation, right? So he was leaving the company and we needed his cooperation for the year going forward because he was key to negotiating the bulk of those deals with the deal with KKR. So we needed his cooperation for the time that he's out on his notice leave. To come in and assist us with any questions whether KKR has a difference of opinion on what was agreed. So we needed an orderly transition and, in fact, he left earlier than we would have expected because Bernard was available and able to come in at September. We weren't sure. Normally you look for a CEO. They might have a 6-month notice period.

Yes, it was quick.

Yes, well, Bernard was on his own leave from his last role. So we were very, very fortunate that he was able to come in. So that's the background. And I just -- that's what the Board was dealing with. So I just wanted to give you the whole context of that, which I think puts it in a different light than my friend in the newspaper who might not know that.

Thank you.

Thank you.

Thanks for that. Thanks, Nancy. Any other questions from the floor? One more? And then I'll move to online.

Hello. Yes. Mr. Chairman, I would like to introduce Mr. Don Walker. Don?

You've mentioned cash payments of [ 400 ] or whatever. It's a lot of money. If you give that [indiscernible] because how much tax is taken -- at $0.47 in the dollar? Or do you do it all in shares?

No, no, no. He would have received that in cash. And I don't know whether...

That's a lot of money for the tax at $0.47 in the dollar, so half of that does in tax.

Yes. Yes, I get your pain.

You meant talking about shares. He was saving shares.

So his plan would have a cash component, and unhurdled equity component, which means just in certain periods of time, 2 years out and 4 years out, he gets shares. And then the other he could have gotten, which we didn't give him was what's called hurdles equity, which means we have to have a certain performance for him to actually get the share grants.

If you put $800,000 into a bank account, the taxation has a look at that. So [indiscernible] get half.

Yes. Welcome to Australia.

We can't control tax laws, I'm afraid.

So I have been here 35 years, disregard my accent, okay?

Thank you. Thanks, Nancy. Can we move to questions online, please?

The first question is from Mr. Stephen Mayne. When disclosing the outcome of voting on all resolutions, including this remuneration report item, please advise the ASX how many of our 43,337 shareholders voted for and against each item, similar to a scheme vote. This will provide a better gauge of retail shareholder sentiment and insight into the chronically low retail shareholder participation rate. Other issuers have already blazed the trail, including Qantas, ASX, Metcash, AUI, Dexus, Webjet, Tabcorp and Maya. You've got the data, so why not be transparent and let the sun shine in?

I think we'll note that as a comment in terms of the way we normally reply for this year, we will continue with the normal form of advising the ASX. It's well known shareholders, look at that result and I wouldn't be proposing that we would make any change. But we do, Mr. Mayne note what you say and we'll have a look at it. Next question, please.

The next question is from Robert [ Donahu ]. How can any board that holds itself out to be prudent even consider paying bonuses Rob Adams and other executives after overgearing the company's balance sheet and presiding over one of the great episodes in wealth destruction in Australia's corporate history?

Thank you for the comment. I think in terms of the presentations and Nancy, I think we've answered that, and we'll just note it.

Chairman, the next question is from Mr. Stephen Mayne. A 90% against vote on the report in the proxy certainly is humbling, as the Chair said, from a historical point of view, these are your competitors. NAB 2018, 88.43% against; Link 2023, 83.40% against; Qantas. 2023, 82.93% against [ have Norman ] 2023, 81.83% against, did all 5 proxy advisers, ACSI, ownership matters, ISS, Glass Lewis and ASA recommend against the rem report and what were their biggest [ growths ]?

Sorry, what was the last part of that?

If all 5 proxy advisers -- so I can answer the proxy advisers. The proxy advisers, the 4 major proxy advisers did advise against the rem report, but the Australian Shareholders Association, which many of you are members of, have voted in favor, recommended that you vote in favor of it. So that was the main difference. It was on the rem report, Stephen was asking? And I think we've addressed most of the concerns you've had in the room with the concerns that the proxy advisers had. The first part was about the records for the other businesses. We will put up the voting so far when one comes up for a vote. So you can see where we stand now. It is a substantial vote against. And then we'll tally up the additional votes that happened today and then the official number for Stephen's number, where he's trying to get the exact percentage is released later on today. Is that correct?

This afternoon.

This afternoon. But it is a substantial number.

And as I explained earlier, that's a first. That would be a first strike. And then it's up to the Board to come back to shareholders at the next AGM and provide its report on what it's done and then shareholders can consider whether it's a second strike and vacate the Board or whether we move on. Okay. Any other questions?

No further questions.

Any questions from the web phone?

Chairman, there are no further questions at this time.

Okay. We now move to the vote. The proxies, they are displayed on the screen. You'll see the substantial vote against. In terms of voting on Resolution 1, please cast your vote if you haven't by selecting the for, against or abstain for Resolution 1 on your voting card. And I'll wait a few moments while that is completed. And then we'll move on to the second resolution. And thank you, Nancy, for your presentation. And once again, thank you for your contribution to Perpetual. Okay. The next resolution is the reappointment of Mona, Mona Aboelnaga Kanaan, to the Perpetual Board. Resolution is on the screen. Mona was appointed as a Director on the 28th of June 2021 and now stands for reelection. The Board considers Mona to be an independent director. She chairs the Technology and Cybersecurity Committee and a member of the People and Remuneration Committee, the Investment Committee and the Board Implementation Committee. The Board supports Mona's reappointment because she brings to the Board a deep knowledge of financial markets, strategic planning and public company governance. Mona has extensive experience in the U.S. and the broader global markets, including U.K., Europe and the Middle East. The directors, with Mona abstaining, unanimously support her reappointment and in favor of Resolution 2. The open proxies that I have will all be voted in favor of Resolution 2. I'll now ask Mona to say a few words and then open it up to questions. Thanks, Mona.

Thank you, Tony, and good afternoon, everyone. It's my pleasure to be back in Australia and here with you today. Firstly, I wanted to thank our shareholders for the opportunity to serve you on the Perpetual Board since 2021 during this period of immense change and transformation. It has truly been my honor. I also want to thank my fellow directors for their support and for their nomination. In my career, I've had the great fortune of truly sitting on almost every possible side of the table. I have been an asset management CEO, a private equity CIO and portfolio manager, an entrepreneur, a technology investor and a director. I bought asset management boutiques and I have sold my own. I know firsthand the opportunities and challenges presented by M&A, expansion into global markets and managing a multi-boutique platform. Over the past few years, Perpetual has grown to become a business operating in key financial markets across the globe. Today, nearly 60% of Perpetual's assets under management are now managed or sold in the U.S., contributing over 30% of our company's revenue. As a former asset management CEO based in the U.S., with more than 30 years' experience in the industry, I have a deep understanding of running these businesses and of the U.S. market. I also have extensive experience in broader global markets, including the U.K., Europe, Middle East, in addition to Australia. I have substantial expertise as a public company director, and I am currently a Director of Webster Financial Corporation, a U.S. bank which is listed on the New York Stock Exchange, and I serve as Lead Director of a technology company called Mondi Holdings, listed on NASDAQ. As Chair of Perpetual's Technology and Cybersecurity Committee, I am very excited and very passionate about the innovation opportunity and the challenges that technology presents us. It has been my privilege to launch this new committee and work with fellow directors and our great management team to oversee this integral part of our enterprise. I'm likewise delighted to serve on the investment part and board implementation committees. It is a significant time for Perpetual, and I believe I have the right skills and attributes as well as the passion and commitment to see this outstanding company succeed. Thank you.

Thank you, Mona. If you could -- I'll now open it to questions from the floor. Okay. Questions online?

There's a question from Stephen Mayne. Thank you for disclosing the market-sensitive proxy position to the ASX, along with the formal address at 9:54 a.m. before the AGM commenced. The proxy show Mona attracted the largest against vote, 17.5%, of the 3 incumbent directors which of the proxy advisers recommended a vote against Mona or any of the Board endorsed candidates today? And if they did, what was their reasoning? Was the chair surprised Mona attracted a 9 million against votes compared with 6.4 million for Paul and 3.3 million for Syl?

Just taking that in part, the -- in terms of information, ISS was the one that had recommended in terms of voting against Mona's reappointment. I think that was based on being on the Remuneration Committee. We looked at that and looked at Mona's broader experience and what she brings to the Board. And quite frankly, the remuneration report is a Board matter. It's a whole board that is accountable for the remuneration report rather than an individual director. And I think while ISS made the point that it made, the reality here is that we have a very experienced director. And when you look at the positive vote, it is overwhelming and substantial. So I don't think that should provide any further basis for voting against Mona's reappointment. In terms of other -- I think the rest of the question was in relation to other resolutions.

It was in relation to other reelection of the other...

Yes. The only other negative vote from memory was the election of Mr. Rodney Forrest that we'll talk later, which didn't attract support from the proxy advisers. Next question?

There are no further questions, Chairman.

Any web questions?

Chairman, there are no further questions at this time.

Thank you. I'll now, as you see, there's the proxies. And then I'll ask you now to vote for, against or abstention. Take a few moments. Thank you, Mona, and congratulations.

Thank you.

We now move to resolution on the reappointment of Philip Wagstaff. Philip was appointed a Director of Perpetual on 1 November '23 and now stands for reelection by the shareholders for the first time. The Board clearly considers Philip to be independent. He's a member of the Remuneration Committee and Investment Committee. The Board supports Phillip's reappointment because he brings to the Board extensive experience in the U.K. and global asset management industry and knowledge and success in the leading global distribution teams. The directors, with Philip obviously abstaining, unanimously support his appointment to the Board and recommend that shareholders vote in favor. All open votes that I have will also be in favor, and I'll now invite Philip to say a few words to shareholders.

Thanks, Tony. I'm very aware that time is moving on. You've all been very patient this morning. And being relatively new. I've just got a few short comments that I'd like to make. I'd like to thank my fellow Board members and you, our shareholders, for the opportunity to stand again following my appointment to the Board last November. There is information in the Notice of Meeting that highlights my background and corporate experience, but I just want to add a little bit of color for you to help you make that decision. I've been in asset management for my entire career, 35 years, and I've served on the Executive Committee of several large global asset managers, some of which you may be aware of, like Henderson, M&G and [indiscernible]. I'm currently also Nonexecutive Chair of a U.K. business called [ U ] Investment Management. I also chair the U.K. subsidiary Board of Aberdeen Fund Management Limited. And previously, I was the Chair of Jupiter Unit Trust Managers and Henderson Investment Funds Limited. I specialize in distribution, what does that mean? It means sales, marketing, product development, brand/these are all attributes that I think will -- I will be able to help the company moving forward as we move through this transition period following the sale of the 2 businesses and become a stand-alone debt-free asset manager. I've also got specializations in mergers, acquisitions and integrations within the asset management sector, I think that can be of particular help at this time. In terms of my global knowledge, I've run teams in Europe, in the U.S., in Asia, and in fact, also here in Australia. I am based in London, and I think that's me a perspective where I can get into the [indiscernible] office quite often. I can help guide and if it needs to be mentor some of the senior team there. As I mentioned, I do specialize in distribution since I've been here about the opportunity to meet with all the senior heads of distribution in Europe, in the U.S., in Asia and here in Australia and offered my help to them for any help that they may need moving forward. I know it's a time of great transformation for Perpetual, and I welcome any opportunity to answer any questions that you may have of me. Thank you.

Thanks, Phil. Questions from the floor? I see there aren't any. Questions online?

There aren't any questions.

And web phone?

Chairman, there are no further questions at this time.

Thank you. There are no further questions, I'll move to voting. Proxies, please cast your vote if you haven't already selecting for, against or abstain, for Resolution 4 on your voting card. The next is the reappointment of Paul Ruiz to the Board. Paul was appointed a director of Perpetual in September '24 and now stands for reelection by shareholders for the first time. In addition to the outline that I gave earlier on Paul's background, the Board considers Paul to be an independent director. He's the newly appointed Chairman of Perpetual's Audit, Risk and Compliance Committee and a member of the Board Implementation Committee. The Board supports his reappointment because he brings to the Board significant experience in financial, management and auditing. The directors, with Paul abstaining, unanimously support his appointment to the Board and recommend that shareholders vote in favor, and I intend to vote open proxies in favor as well. I'll now invite Paul to say a few words. Thanks, Paul.

Thank you, Tony, and thank you, shareholders. It's good to be with you here today, both virtually and in person. As a fellow shareholder, it's a privilege to be standing for election to your Board. And I'd like to provide a brief summary of my experience and how I intend to contribute to working in the company. I'm fortunate to have had a wide range of professional experience throughout my career to date and look forward to applying this experience to Perpetual. I'm a chartered accountant by background. I spent most of my executive career at the Big 4 accounting firm, KPMG, which I joined a predecessor firm of that in 1986 in the U.K. before qualifying as a chartered accountant moving to Australia. And I finished as a partner here in 2016, nearly 8 years ago. Most of my professional accounting career was spent auditing large listed financial services companies. And of particular relevance to my appointment to the Board, I was the auditor of ANZ Bank's funds management and insurance operations when that business was separated from a bank and put into a joint venture with the Dutch group ING back in 2002. So I've gone through the separation process in that context. And then 8 years later, I again found myself the auditor of that joint venture when, again, the joint venture was dissolved and there had to be a second round of separation this time from ING. Importantly, while I've spent my career working with similar businesses and have a deep understanding of the financial services industry from my time with KPMG, I never worked on a Perpetual account. I can assure you that I will be an independent and unbiased director, bringing that mindset to my work as a member of the Board and as Chair of the Audit Risk Compliance Committee. Since retiring from executive life almost 8 years ago, I've been fortunate to have a number of nonexecutive roles, including consulting to the Australian Accounting Standards Board. And often in those roles, I've been responsible for leading the Board oversight of the audit and risk functions. And I've done that with organizations across the full purpose, government and corporate sectors, including with ASX-listed businesses. I currently sit on the board of Tower Life, one of Australia's leading life insurers, where I chair the Audit Committee. And during my time on that board, we've successfully integrated 2 major acquisitions, including most recently, the business we bought from Westpac, the acquisition and the integration, which was completed last year. Perpetual has a long and proud history as an established business in Australia, and I look forward to contributing to it in the future as a streamlined global multi-boutique asset manager. I'm honored to have the opportunity to serve on the Perpetual Board to which I'll bring my audit, controls, risk governance and reporting experience. I believe I have the skills and experience to make a meaningful contribution to the work of your Board and on that basis, I seek your support today. Thank you.

Thanks, Paul. I see we have a question from the floor.

Chairman, I'd like to introduce Ms. [ Fiona Balzer ].

Thank you, Chair. I'm here representing the Australian Shareholders Association, and we are voting for proxies for -- 159 proxies for about 231,000 shares. I would like to ask Mr. Ruiz, what his thoughts are on tendering for the audit. We acknowledge his long separation from KPMG and the lack of involvement in the Perpetual audit. But KPMG has been the auditor from at least 1991, if not before.

1991, I think is correct.

Is it? The start date. And we would just like to know what your opinion is on considering an audit tender, which doesn't necessarily change the audit firm but puts it up for deep consideration by a Board, please?

Thank you, Paul.

Ms. [ Balzer ], thank you for your question. I'll take the question on notice. It's been a relatively short period, I think, just 5 weeks since I was appointed to the Board. And the question you asked is a really important one. So what I will say is that I want to raise this with the Audit Committee for their deep consideration because it is an important matter and it's one that needs to be considered in a deep and considered way.

Thank you. I see no other questions. Questions online?

There are no questions online, Chairman.

And web phone?

Chairman, there are no further questions at this time.

Okay. The proxies are shown, vote on Resolution 4, vote for against or abstain. Thank you. We now come to Resolution 5 and the next item of business is the appointment of Mr. Rodney Forrest, Mr. Forrest has put name forward for election. Rodney, could you stand up, please? I just want to see where you are, would you mind coming to the lecturn. Thank you. The Board has considered Mr. Forrest's nomination in the context of the Board's skills assessment and its composition that has reviewed his skills and experience against those already represented on the Board as reflected in our skills, management and governance metrics and those required for the execution of the Perpetual strategy. The Board has also considered the extent of Mr. Forrest's experience in director and senior management positions and sophisticated globally operating companies of scale and complexity similar to Perpetual. And in regard to those matters and what's in the best interest of the company, the Board has determined not to support Mr. Forrest's appointment. But importantly, for shareholders, Appropriate background checks were completed before Mr. Forrest's nomination to be elected, was included in the Notice of Meeting. The Board considers that Mr. Forrest will, if elected, qualify as an independent director. Mr. Forrest provided his biographical information, which is included in the Notice of Meeting, and that information has been independently verified by Perpetual. As I said, the directors do not support the election of Mr. Forrest to the Board, the Chairman -- as Chairman of the AGM, I intend to vote all available proxies to me against Resolution 5. I'll now ask Mr. Forrest to say a few words, as I've done with other candidates for election and then move to questions in the same way. Mr. Forrest?

Thank you, Chairman. It was a privilege to hear all the directors think about their background very high-caliber pedigree. So firstly, it's an honor to speaking in front of you. This is an institution that holds dear to me. And I especially want to thank the Chairman for the time over the last 6 months in listening to my views on the business. When I first took on the pursuit to be a Perpetual director, I knew it would not be an easy task. Yet when good people do nothing, bad things can happen. I simply could not stand back and let an institution that my late farther, 32 years ago, invested in continue to decline. This institution has more hall of famers and founded a lot of my investment principles that led to my success today. Today, I believe we are all investors in what is a broken business model that is in need of urgent repair. Our share price is a 25-year low. We have a levered balance sheet, and rumblings from my contact on the street are that we potentially will lose key fund manager talent. We need change and I am your voice for change. I've been so encouraged by the small minority shareholders who have reached out to me when I emailed them. They are both frustrated and angry. One man even said to me he was going to burn the AGM notice until he received my letter, and he had been invested for 23 years. What is clear is we must go back to our DNA. I know what we need to do to win. I have studied and worked inside some of the world's great businesses. It's remarkable how firms like [ Aldi ], Ikea and Google, they all share common practices. There are 7 principles. One, they do not risk at all. We unfortunately did by leveraging our balance sheet and increased debt 750%. We now are 4 sellers of our crown jewel asset but there may be a different way. They don't abandon principles that they built success. We unfortunately did by ignoring the 4-step investment process that our own investment managers apply. They don't trade away legacy and brand. This has been a key central point of my view that we cannot lose a Perpetual brand name to KKR after 7 years. They also measure what matters. We don't and instead use -- we use underlying EPS, not statutory EPS. Our fund went up 10x, but our statutory profit today is 50% lower. They also have a business they grow their poor profit pool and focus on that. Said we went to adjacencies that quite frankly have failed as the latest write-down has proven. Palma, which is the Australian division in the last statutory accounts, I went bottom up by every product and every fund manager. My calculation is around 70% of our profit pool. We must now urgently go back and apply the Charlie Munger cancer surgery mental model and cut away unproductive limbs. Six, these other businesses gain more efficiencies over time and empower their existing staff. We have a 602 fund managers and analysts according to LinkedIn. We must now shrink to succeed, and I wish our new CEO will. They invent and start with the customer, not the product. We haven't, in my view, we've laid on more products. We have nearly 150 products with over 60% subscale. Bottom-up, the Australian Equities division is generating $7 million revenue per employee, while Barrow Hanley, James Barrow, [ Pendal, TSL ] are sub $1 million to $1.3 million. We acquired potentially wrong. We do not need more products or more people, we need performance. I've been fortunate to sit next to one of the world's greatest investors in [indiscernible] family office. And he proved we can run billions with over 100 positions in many countries with 3 people, and his performance is world class. Today, there are over 1,800 equity products in Australia. If we just do what everyone else does, we will become mediocre. What we need now is 10x thinking, as Larry Page says, not 10% improvements. We need new energy, we need to spot and reward internal talent. We need to start of a blank piece of paper. And like building a retail store, which I did in my previous career, you start with the shelf. We need to go back to first principle, start again, put our hand up and so we made mistakes. We have so much to fix. But if we all buy in, the future can be very bright. I'm not saying I have all the answers, but what I will bring is a fact-based evidence approach. If we're not brutally honest, the ice cube may melt faster. I will strive to preserve the brand, restore confidence and support our wonderful team. We need simplicity and clarity of thinking and, right now, I'm your chance. So thank you for listening and consider me as a Director of Perpetual. I wish you all the best.

Thank you. Thank you, Mr. Forrest. I think the contrast between that and what we've been saying at the meeting is quite clear. So are there questions from the floor? Are there questions online?

Yes, Chairman. The question is from Stephen Maine. Could the Chair explain why the open proxies for the Rodney Forrest selection are 13.1 million, whereas they were below 1 million for all the other resolutions.

I'm sorry, could you just repeat that?

Yes. Okay. Could the Chair explain why the open proxies for the Rodney Forrest election are 13.1 million, whereas they were below 1 million for all the other resolutions. Was this because Mr. Forrest wrote to thousands of retail shareholders and successfully solicited for open proxies because a few largest shareholders are keen to vote on this resolution from the floor or because of the way the voting materials were presented, which delivered a large chunk of undirected proxies to the chair, which will be voted against? Or was it a combination of all 3?

It's an interesting question in the sense that the open proxies are matters for shareholders, so they can elect to vote the proxy, direct the proxy or leave it to me and to be voted in accordance with the Board. And I do not know why that is a high number. It probably represents the confidence they have in the Board and the chair to vote those proxies. And it was definitely known when those proxies were like, what our position was, it's in the notice of meeting. As I spoke earlier, I've had discussions with Mr. Forrest just gone through our nomination process. And the outcome at this time is that we do not support and the proxies are what the proxies are and the open votes are what I've been given. And I can only speculate on the shareholders who may have given those open proxies. I have no intention to go and look at that. That's a matter for the shareholders themselves. But I will vote the proxies. The open votes against the resolution. Are there any other questions online?

There are no other questions, Chairman.

Web?

Chairman, there are no further questions at this time.

And Rod, is there anything else you want to...

None. Thank you.

Thank you for coming. And generally, thank you for putting your name forward. That takes a lot to do that, and I congratulate you for doing that. Now the proxies are up, and you can see the -- there. Please cast your vote if you haven't, for, against or abstain. Thank you. The next item -- I'll just -- sorry, I'll just wait a few seconds while people do that. Okay. The next is the hurdled equity grant for the new CEO and Managing Director. Resolution 6 seeks that approval as we've said Mr. Riley commenced as the new CEO on the 2nd of September, as outlined in the remuneration report, the notice of meeting, there's an initial award of hurdled equity with a face value of $1 million. which will be made on or about the 1st of April 2025, assuming the transaction with KKR is completed. If completion is delayed, the LTI award will be allocated post completion or otherwise before 30 June. 50% of the performance rate represent the face value of $500,000, will vest on 1 September '27, subject to KKR -- a TSR hurdle of 7% to 10% measured from the allocation date to the vesting date, 50%, representing the face value of $500,000 on 1 September '28, subject to meeting the TSR hurdle. So I'll move to questions from the floor. Questions online?

There are no questions online, Chairman.

Web phone?

Chairman, there are no further questions at this time.

We move to the proxies. Could you please vote for, against and abstain? Okay. Thank you, and we're nearly there. So thank you for your patience. The final matter are the proportional takeover provisions. This is a renewal process we do every 3 years. It's required under the company's constitution and the Corporations Act. I mean, essentially, by way of explanation, many public companies have proportional takeover provisions in their constitution. Under a proportional takeover bid and acquire offers to buy only a certain percentage of each shareholder's parcel. The benefit of the proportional takeover provisions in such circumstances rather than to each shareholder deciding on their own on whether or not to accept the offer. But in putting these provisions, we really are seeking to make sure that there's equity between all shareholders when such proposals are put forward. And as of the date of the notice and as today, other than the KKR transaction, we don't have any proportional takeover offers for the company. There is full information on this. I'm sorry, I've hurled it through, but there is full information on this in the notice of meeting. And as I said, we do this every 3 years. Are there any questions from the floor?

Question from Ms. [ Rita Mazalevskis ].

Thanks, Rita.

As we know, KKR is purchasing Perpetual's Wealth Management and Corporate Trust business unit for approximately $2.2 billion.

$2.175 billion.

Yes, I said approximately $2.2 million. Yes, not exactly. In regards to assets, assets represent contractual obligations to make payments and only contracts and mortgages and loans and agreements that define payment obligations create the contractual cash flows necessary. Given what's been revealed within my own contract and mortgage with Perpetual, I fear Perpetual's business and KKR's purchase may involve assets of no value, which have no legal contractual obligations attached, as instruments are not effectual until registered. These are serious breaches in my own case, where my assets had no contractual obligations attached legally, and they weren't registered against the assets. Yet Perpetual gained unjust enrichments and others. Perpetual has stated on its website, it checks loans. This is under the securitization area. So my question is has Perpetual done its due diligence and checked all the assets it has taken? And does it have the required and lawful contractual obligations attached? If yes, how does Perpetual undertake this? And if no, why hasn't it done it?

Separate 2 issues, your matter I've commented on, and that's -- it's not related at all. In terms of the contractual arrangements that -- I'm sorry, trying to answer the question. In terms of the contractual arrangements with the KKR and the scheme implementation that's in place, the processes are in place, they have due diligence committees. We have due diligence committees. As you would expect, a huge amount of work goes into making sure that assets that are transferred or assets that have bought have the value the parties have ascribed to them, and we're not dealing here with an organization that doesn't have access to legal advice or whatever. So I think, in terms of Perpetual and KKR, I think that's clear, that's positive. There is a contract. It will now be up to shareholders on what happens with that. On your matter, as I said, we are not taking it further. And thank you.

But do you agree and the Board agree that assets that have no contract attached to or registered have a mortgage with no principal sum and no obligation whatsoever? So it's a mortgage that's void of anything. In my matter, I didn't sign mortgage, but you've ignored that. So there's critical issue.

I'll leave that as a comment that you make.

Just in regards to our communication earlier, I'm really upset because I felt quite bullied. We've been liaising for 6 years, and I've been very respectful to you and the Board, all the executives. I am flabbergasted that you would not let the CEO use his own voice to speak to me when I've flown all the way from Perth. Because you won't allow the CEO to meet with me, and I live in Perth. I need to ask this question. Could you tell me or someone on the Board tell me what is the process and who do I have to speak to, to arrange pre-court discovery, including all securitization documents and agreements, so I can clearly ascertain fully what my action is against Perpetual because it has an inconclusive investigation report, please?

We have gone through it quite.

No, we haven't addressed this. This is not -- that's actually a lie, Chairman.

I'll take that -- I think you should withdraw that because that isn't the position.

No, that's a lie. We have not talked about it.

Well I propose to a hold. No further discussion at this point.

This is the advise I have received. Just before coming here, you and I have not discussed this and the Board has not discussed it. I need to know who I need to send that request to, so who would that be, please? As a shareholder, the pre-court discovery, who do I send it to? Because if you don't instruct me the right way I'll have to go to court and request it through a court action.

I think you should seek legal advice on that matter.

That goes clearly against your internal dispute resolution process, where you foster me onto the customer advocate in the process by passing IDR. Customer advocate is when you're not happy with the IDR process, not combined together. So there's floors in Perpetual in all other areas?

What is this specific issue that you -- please go over it again because I'm lost in this. We've spent a lot of time on this.

We spent 6 years. You've been intimately involved with my matter. And you've decided in the last 78 days through our communication of which I've made my e-mails public to ministers and to media that there are emissions, fortified information. You've ignored facts. I can go on and on and on. It's like there is a cover up. You don't want to acknowledge what has happened in my manner. I'm not going away. I'll come here for 20 years. You might be sitting at home on your couch watching through the webcast, but your name will be repeated year after year after year for your failures in managing my manner and Mr. Adams which has been unfair and today, I have felt very bullied because you will not allow the CEO -- the new CEO to speak to his own shareholder or to meet with me, and I have traveled across Australia.

I will ask the CEO to review your file and your forms are in view.

But I'm here now. I would like to have a pre-meet. He can review my file. I would love that, obviously. He has to be across it.

I'm sure he'll talk to you after.

But he has to understand, when Perpetual did its investigation findings on the 8th of May 2020, I informed the CEO and you that the information was incorrect. You ignored me and you've run with it. And sorry, Mr. Riley, you need to be aware that, that investigation report is inconclusive, but contains wrong information and wrong facts.

Okay. Thank you. I don't propose to go any further with it. Any other questions online.

Yes, Chairman. We have one last question from Stephen Maine. Given the interesting discussions across the range of topics today and all the issues at stake going forward, could the Chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website until at least next year's AGM. The likes of 9, AGL, ASX, ANZ, Domino's, IAG, Lendlease and Woolworths, all routinely produce AGM transcripts. Will you follow suit today because more than 99% of your shareholders did not watch this 3-hour-plus meeting live and deserve access to the record?

I'm just trying to remember what is our policy on that?

We do not place the transcript on the website, but we do place the webcast link.

We'll maintain that policy. Thank you for the question. Okay. Any from web?

Chairman, there are no further questions at this time.

We're still voting on this Resolution 7. These are the proxies. Please vote for, against or abstention. Okay. That completes the voting. The further -- I'll now ask you to make sure you've completed all your voting cards, they'll be collected and a link will now come around and collect those voting cards to be placed in the ballot boxes. For the shareholders that are online, if you're uncertain about any of the voting procedures, please use the helpline number. Voting on the polls themselves will close in 5 minutes. And as I said, once the returning officer has finished to count the votes, they will be submitted to the ASX this afternoon and will be made available on the AGM section of Perpetual's website. Let me close the meeting. I think it's been a very good meeting. I think the directors are grateful for the directness of the questions and comments. I'm sorry that there were questions that could not be answered or there were questions where we weren't prepared to take matters further. I think the main issue is thank you for your participation. The next major milestone for the company will be the scheme booklet and the examining of the scheme and your vote on that. So thank you for coming today, and we look forward to seeing you at the next meeting. And with that, I'll end the meeting and close the meeting. I think there are light refreshments outside for those that have got time to stay. Thank you. Thank you, everyone.