Question

In: Accounting

Should the chairman be the main person in charge of Woolworths "Over Wages" scandal or should...

Should the chairman be the main person in charge of Woolworths "Over Wages" scandal or should he be removed?

Can chairman be removed at the annual shareholders meeting or should be removed at the board meeting? Why?

What is the difference between a board meeting and an annual shareholder meeting?

Solutions

Expert Solution

1) Should the chairman be the main person in charge of Woolworths "Over Wages" scandal or should he be removed? -

Woolworths faces a possible protest vote against its remuneration report at the annual meeting next month as the fallout spreads from its $300 million wages underpayment scandal.

Representatives from the Australian Shareholders Association (ASA) plan to grill Woolworths chairman Gordon Cairns this week about when the company first became aware of the scale of the underpayments.

The ASA also wants to know when millions of dollars in bonuses were issued to senior executives, including chief executive Brad Banducci and managing director of supermarkets, Claire Peters.

According to Woolworths' annual report, Mr Banducci received a short-term bonus of $973,830 and share based payments totalling $3.9 million in 2019, while Ms Peters received a cash bonus of $442,650 and share based payments of $1.4 million.

Mr Banducci revealed last week that at least 5700 salaried supermarket staff had been underpaid for almost a decade and it would cost the retailer between $200 million and $300 million in compensation.

"We will hear what the company has to say, not only in our meeting but over the next couple of weeks, before we finalise our voting intentions in late November," Mr Adams said.

Proxy advisers said they would also be speaking to Woolworths in coming weeks but had yet to compile their recommendations to shareholders and declined to comment.

Woolworths started reviewing salaried staff in February with the assistance of PwC when a handful of managers questioned why they were paid less than union staff under a new enterprise agreement.

Woolworths first alerted Fair Work in August about 'non-compliance' issues but did not reveal the scale of the underpayments until last Wednesday, when it released September quarter sales.

Major companies including Wesfarmers, David Jones and Metcash are now checking payroll processes to make sure they are correctly paying staff.

Meanwhile, Woolworths is pressing ahead with the $10 billion demerger of its liquor, hotel and gaming operations, releasing scheme documents for the restructure of the businesses to create a separate legal entity, Endeavour Group.

Shareholders will be asked to approve the restructure – the first stage in a three-step process that will ultimately lead to the demerger, float or sale of Endeavour Group – at a scheme meeting on December 16, the same day as the AGM.

Woolworths directors unanimously recommended shareholders vote in favour of the restructure, saying the advantages outweighed the disadvantages and risks.

They said the restructure would result in a simplified corporate structure for Woolworths Group by reducing the number of companies and creating potential efficiencies and enabling the merger of ALH and integration of drinks and hotels to facilitate the creation of a cohesive brand and culture.

"Implementing the restructure is an important initial step in achieving this integration," the scheme documents said.

The potential cost savings and efficiencies were not quantified and no new financial information was disclosed.

"Importantly, the restructure scheme will not result in a change in the number of shares that you hold, cause any income tax consequences for you or negatively impact the ability of Woolworths to pay dividends," Mr Cairns said in a letter to shareholders.

However, the first stage of the restructure will lead to one-off transaction and implementation costs of about $108 million, on top of about $23 million in costs incurred in the planning stage.

The subsequent merger of Endeavour Drinks and ALH does not require shareholder approval and is expected to be completed in early February.

Woolworths intends to seek further shareholder approval at stage 3 – the separation of Endeavour Group from Woolworths Group – which is expected to occur in calendar 2020.

Woolworths shareholders have generally welcomed the merger and subsequent demerger, which will reduce Woolworths' exposure to poker machines and possibly lead to a capital return. But some are worried about the dis-synergies and extra costs created by separating businesses that have been inextricably linked since Woolworths first ventured into liquor in 1998.

Woolworths' shares have risen 14 per cent since the merger/demerger was announced in July, although the stock has lost ground following the underpayment revelations.

2)Can chairman be removed at the annual shareholders meeting or should be removed at the board meeting? Why?

Where the company's articles appoints the Chairman, the meeting cannot remove him unless it is due to bad faith, impartiality or abuse of authority. This section applies to a private company unless its articles provide otherwise.

A chairman elected for the meeting on the spot, may be removed or suspended by the participants of the meeting if the person concerned is found incapable of conducting the meeting. A chairman nominated by the Government cannot be removed by the members.

3) What is the difference between a board meeting and an annual shareholder meeting?

Main Differences Between Annual General Meeting and Board Meeting. ... Key members in Annual Meetings are the shareholder and investors whereas key members in Board Meetings are members of the Board.

  1. No matter where the organization is located or in which country every organization must have at least one Annual Meeting in a year as it is mandatory even by the law so that the shareholder’s and Investors interest could be looked after and taken care of.
  2. Board Meetings can be held in an emergency or at any day and can be held numerous times to take important decisions and to look over the functioning of management of the organization or the enterprise.
  3. Annual Meetings are less impactful whereas Board meetings are more impactful and helpful.
  4. Board Meetings can sometimes consume a lot more time than annual meetings which can cause loss of work.
  5. Key members in Annual Meetings are the shareholder and investors whereas key members in Board Meetings are members of the Board.

Conclusion

Meetings hold an important place in the functioning of this world. Meetings help us to socialize and to decide our plan of action which could be beneficial for us.

Different kinds of opinions being shared under one roof all with the same aim of improving and getting better results whether you call it individual results or combined results.

Big organizations and enterprises hold meetings that can be divided into Annual Meetings and Board Meetings both of which are necessary for the better functioning of the management and growth of the company.


Related Solutions

Janet Yellen, the Federal Reserve Chairman, is often times called the second most important person in...
Janet Yellen, the Federal Reserve Chairman, is often times called the second most important person in the United States or even the world, after the president of the United States. However, she was not elected. The chairman does not have to obey any elected official, even the president. Do you believe that the independence of the Federal Reserve Chairman is beneficial to the country? Why or why not? Be sure to cite at least two reasons.
Does the president or head chairman of the federal reserve have more influence over our economy?
Does the president or head chairman of the federal reserve have more influence over our economy?
Should there be minimum wages and why is this morally defensible?                               &nbs
Should there be minimum wages and why is this morally defensible?                                                               
Describe the main explanations for the downward rigidity of wages in the modern macroeconomy. Evaluate their...
Describe the main explanations for the downward rigidity of wages in the modern macroeconomy. Evaluate their probability of being correct and important.
What is the title of the person in charge of the U.S. Department which oversees the...
What is the title of the person in charge of the U.S. Department which oversees the three mints
A CRITICAL REVIEW ON KODAK; CORPORATE GOVERNANCE SCANDAL “With a few Kenyan companies over the recent...
A CRITICAL REVIEW ON KODAK; CORPORATE GOVERNANCE SCANDAL “With a few Kenyan companies over the recent past experiencing considerable losses or completely folding, the well-known narrative of Kodak’s downfall provides more than just a snapshot of why effective corporate governance is not simply about avoiding slip-ups, but about taking a proactive, innovative approach even when the picture seems full of colour. In 1997, Kodak was among the most successful firms in the world. It was worth an astounding $31 billion...
Due to nissan scandal should investors buy, hold, or sell this stock? Is there any weight...
Due to nissan scandal should investors buy, hold, or sell this stock? Is there any weight to the news around Nissan's new direction? Do you believe Nissan can recover from the financial and reputation damages?
3. The person in charge of the finances of the company MGT, S.A. wants to know...
3. The person in charge of the finances of the company MGT, S.A. wants to know the company's situation concerning the industrial sector to which it belongs. For this, it has the following information regarding the industry: General liquidity ratio is 1.55; the acid test is 1.20, and the ratio between the available and the current liabilities is 0.95. The debt ratio stands at 1.25. The margin on sales is 21%. The investment rotation is 1.45 times. Economic profitability is...
Q. 2. The newly elected municipal chairman has taken over his new office. After reviewing the...
Q. 2. The newly elected municipal chairman has taken over his new office. After reviewing the files and visits in his area, he is of the view that they require major infrastructural changes in his municipality i.e. repairing the sewerage lines, constructions of roads and green belt etc. This would require a huge investment and hence the issuance of municipal bonds. You have been hired as his financial advisor and hence are required to do the following; a) To brief...
Q. 2. The newly elected municipal chairman has taken over his new office. After reviewing the...
Q. 2. The newly elected municipal chairman has taken over his new office. After reviewing the files and visits in his area, he is of the view that they require major infrastructural changes in his municipality i.e. repairing the sewerage lines, constructions of roads and green belt etc. This would require a huge investment and hence the issuance of municipal bonds. You have been hired as his financial advisor and hence are required to do the following; a) To brief...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT