Good afternoon, ladies and gentlemen. My name is Stephen Johns, your Chairman. It's my pleasure to welcome you today and to declare the twenty nineteen Brambles AGM Open. There are copies of the notice of meeting and of the minutes of our last AGM in the registration area. With your agreement, I propose to take the notice of meeting as read.
Thank you. I'd now like to introduce your directors and senior executives. On my far left is Elizabeth Fagan George L. Sogbe Brian Long, the Chairman of our Audit Committee our Chief Financial Officer, Ness Rosullivan and our Chief Executive Officer, Graham Chipchase. From my far right is Jim Miller, Scott Perkins, Tyra Hassan, David Gosnell, Tony Froggart, the Chairman of our Remuneration Committee, and Robert Gerard, our company's secretary.
David is retiring at the conclusion of today's meeting after serving for more than ten years on the Board. I'll make comments on David's retirement in my formal address, but I'll note now that David has made a significant contribution to the Board during his period of office and we will really miss him. Jim was appointed during the year and stands for election today and George and Tony stand for reelection, each of whom has the unanimous support of their fellow directors. Long sitting with us in the front row here is Sue Holland and Eliza Penny from our external auditors PwC. Welcome.
We'll be holding a poll and all the resolutions before this meeting, and I'll now open the poll. Any shareholders leaving early may place their completed voting cards in the ballot boxes by the exit doors. I'll explain the voting procedure when we reach the formal part of the meeting. I'll shortly deliver my Chairman's address. After I've spoken, I'll hand over to Graham Chipchase to provide his CEO address, and Tony Froggart will then review our remuneration policy.
And after Tony's report, I'll respond to the most frequently asked questions from shareholders, which we received before today's meeting. I will then take any questions from the floor before we move on to the formal items of business. We are webcasting this meeting for the benefit of shareholders who could not attend in person, and we'll publish the webcast on our website. Now turning to my address. Brambles, as you know, is the global leader in platform pooling solutions, serving customers in approximately 60 countries with around three thirty million pallets, crates and containers and supported by a network of over seven fifty service centers.
In FY 2019, we achieved strong revenue growth and an increase in earnings despite cost inflation in our global businesses and some broader cost challenges during the year. In constant currency terms, our sales revenue was USD 4,600,000,000.0, up 7% on the previous year, and underlying profit increased 2% to US803.7 million dollars The Board declared total dividends for the year of AUD $0.02 9 per share, in line with FY 'eighteen. The interim dividend was CHF 65%, and the final dividend, which will be paid today, is CHF 30%. In May, following our comprehensive strategic review and the successful sale process, we completed the sale of our Ifco RPC business to Triton and a subsidiary of the Abu Dhabi Investment Authority for USD 2,500,000,000.0. With the sale complete, Bramble's is now one streamlined business with a real opportunity to leverage its industry leadership to become more responsive to customers' needs and global supply chain challenges.
It is within this context that the Board and management team are taking active steps to reshape Brambles for success in the 2020s into the 2020s and beyond. We are focused on becoming more customer centric and deploying new physical and digital technologies to transform our service offerings and how we operate. We intend to return US1.95 billion dollars of the sale proceeds to you, our shareholders, through two mechanisms. The first is non market share buyback for up to $1,650,000,000 which actually commenced on the June 4. We expect to implement this in an orderly fashion through to FY 'twenty one.
The second is a pro rata cash return of $0.02 9 per share, equivalent to approximately USD 300,000,000. The cash return is in addition to your normal dividend and has two components: a capital return of AUD $0.01 2 per share, which is subject to shareholders' approval at today's AGM and a special dividend of AUD $0.01 7 per share, which will be paid to shareholders on the October 22. The remaining proceeds we utilized to reduce debt to maintain our strong balance sheet and investment grade credit rating. The Board has also undertaken a review of our dividend policy and capital structure. We have decided to move to a payout based dividend policy commencing with the 2020 interim dividend.
This policy will target a payout ratio of 45% to 60% of underlying profit after finance costs and tax, subject to the company's cash requirements and will be declared in U. S. Currency and converted and paid in Australian currency. The Board believes this dividend policy, while potentially creating increased volatility in Australian dollar terms, is appropriate to support future growth opportunities, align shareholder payments with movement in our earnings, which are reported in U. S.
Dollars and maintain Bramble's strong investment grade credit profile. I'll now turn to Board composition and renewal. In light of my intention to step down as Chairman at the end of my current term, a subcommittee of the Board chaired by Tony Froggatt was formed to conduct the succession process for the Board. This process remains on track to appoint a successor in advance of my retirement in 2020. As part of the ongoing Board renewal process, changes to the composition of the Board during FY 2019 saw the retirement of Carolyn Kay at the conclusion of the twenty eighteen AGM and the appointment of Jim Miller as a Non Executive Director in March 2019.
With a career spanning senior executive roles at companies such as Amazon, Google, IBM and Cisco, Jim has extensive experience and detailed knowledge of digital technology and data analytics and the values these can add to supply chain. Jim stands for election at today's AGM. Additionally, one of our long standing Non Executive Directors, David Gosnell, has decided not to stand for election and will retire at today's AGM. On behalf of the Board, I'd like to welcome Jim and thank both David and Carolyn for their valuable contributions. Tony Froggart here on my right, who has been on the Board for thirteen years, has agreed to stand for reelection at today's AGM to facilitate a smooth transition for the new chair and provide continuity and stability for the board.
If reelected, Tony has indicated that he will retire within his three year term. Non Executive Director George L. Sogbe, who's on my left here, who joined the Board in 2016, stands for reelection at today's AGM. We as a Board were conscious that replacing Carolyn Kay with Jim Miller meant that the female representation on our board reduced from four members to three representing 27%. While our aim is always to recruit the best candidate, we're also mindful of the importance of gender diversity in achieving our 30 target representation at Board level.
This will be an important factor in our future recruitment process as we seek replacements for David Gosnell and Tony Froggart. To conclude, I'd like to thank our management team and all our employees for their efforts and ongoing commitment during the year and you, our shareholders, for your attendance at this year's AGM and for your ongoing support for Brambles. I'll now hand over to our CEO, Graham Chipchase. Thank you very much.
Thank you, Stephen. Good afternoon, ladies and gentlemen. At Brambles, our purpose is to connect people with life's essentials every day. Through our share and reuse model, we move more goods to more people in more places than any other organization, and that's something we're very proud of as it allows us to make a real contribution to shaping a smarter, more sustainable future. In keeping with this theme, in fiscal twenty nineteen, we launched Zero Waste World, a new working collaboration for leading companies committed to creating smarter and more sustainable supply chains.
With our network capabilities and the power of our logistics platform, we are working with our customers to find new ways to address three critical industry challenges: eliminating waste, eradicating empty transport miles, and cutting out inefficiency in the supply chain. Sharing these global challenges, we have a unique opportunity to accelerate simple and sustainable solutions. Similarly, we have worked on the fundamentals of our business to make sure they remain robust and sustainable. We continue to explore new ways to deliver higher levels of efficiency in our service center network and continued our path towards a digital supply chain to deliver benefits to customers and Brambles. We continued to invest in first and last mile solutions, particularly in Europe, and accelerated our efforts in material science and innovation platforms.
We successfully rolled out best in class automation and procurement initiatives in The U. S. And facilitated best practice and expertise sharing across the group. We are passionate about bringing more value to our customers and delivering innovative service offerings that meet more of their supply chain needs and transforming the customer experience of doing business for Brambles. Before addressing our results for fiscal twenty nineteen and the first quarter trading update for fiscal twenty twenty, I'd like to take a moment to outline the operating conditions we faced during fiscal twenty nineteen and the first March of fiscal twenty twenty.
The operating environment in fiscal twenty nineteen was characterized by macroeconomic uncertainty and continuing inflationary pressures. Ongoing uncertainty surrounding Brexit and how it would be implemented impacted inventory levels across the retail supply chain in The UK. We also experienced slower organic growth, particularly in Western Europe and within the automotive industry. In The United States and Europe, input cost inflation remained high by historical standards, although the rate of transport and lumber inflation started to moderate during the year. Competition in all markets was strong but rational, while our customer base continued to adapt to changes in the retail landscape, including omnichannel proliferation, the ongoing growth of e commerce and increasing automation in the supply chain.
Now looking at our financial performance. In fiscal twenty nineteen, we delivered constant currency sales revenue growth of 7%, reflecting ongoing customer conversions in all markets and increased price realization in response to the high inflation environment. Underlying profit growth of 2% was modest as ongoing cost pressures in Czech Americas were only partly offset by price and supply chain initiatives in the region. We continue to make good progress with our U. S.
Margin improvement initiatives and other initiatives in The Americas regions and remain confident these actions will deliver over the medium term. Turning to our trading update for the 2020 financial year. We delivered constant currency sales revenue growth of 5%, primarily driven by strong net new business growth and improved price realization across the group. This is in line with our expectation for sales revenue growth in fiscal twenty twenty to be at the lower end of our mid single digit objective on a constant currency basis. As mentioned earlier, we are experiencing moderating input cost inflation and other cost pressures in our major markets and are seeing a broader slowdown in global underlying economies.
Given the macroeconomic environment, underlying profit in fiscal twenty twenty is expected to be in line with or slightly above sales revenue growth on a constant currency basis, including the impact of the new leasing standard AASB 16. Our global automation and procurement programs remain on track and are expected to deliver margin benefits from financial year 2020. We remain confident that the heightened focus on asset control and efficiency across the group will deliver cash flow benefits over the medium term and deliver superior shareholder returns over the longer term. Moving on to our investor value proposition. Many of you will be familiar with our virtuous circle value proposition.
We're able to achieve superior operational efficiencies thanks to our network advantage to scale, density and unrivaled expertise. These operational efficiencies generate cash flow, which we either reinvest in the business to fund growth, innovation and the development of our people or we return to you, our shareholders. Our aim is to deliver sustainable growth and returns well in excess of the cost of capital. This includes delivering through the cycle sales revenue growth in the mid single digits, underlying profit growth in excess of sales revenue growth, strong return on capital invested and free cash flow sufficient to fully fund capital expenditure and dividends. Turning to sustainability.
Sustainability is integral to what we do and to the value we offer supply chains around the world. Our circular business model defines not just how we do things, but who we are. It also provides our customers with proven circular foundation as they adapt to changing consumer expectations around the provision of more sustainable products that reduce both their costs and environmental footprint. During the year, we continued to make good progress towards our 2020 sustainability goals and have once again delivered year on year improvements in sustainable lumber procurement and the adoption of more renewable energy takes us closer to our 2020 carbon emissions goals. I'm pleased to announce that in fiscal nineteen, we committed to responding to the recommendations of the task force on climate related financial disclosure.
In doing so, we seek to enable our shareholders to have a clear understanding of how Brambles will manage the financial risks and opportunities of climate change and provide confidence that as a business, we will continue to prosper over the longer term. We're very proud to be globally recognized as a leader in third party environmental, social and governance programs. This recognition includes being a leader in the top 1% of companies analyzed by Sustainalytics and the second most sustainable international company in the world by Barron's, a leading US financial magazine. In addition, we've reduced by 18% our carbon emissions per pallet since 2015. And in the last year, we have stopped 1,400,000 tons of physical waste from going to landfill.
Turning to safety. Our people are our greatest asset and their safety is our most report important responsibility. So it's with very great sadness that I advise you of a fatality at our Belle Puche facility in Spain in July 2019. This loss has impacted us greatly, and we're doing everything we can to avoid a terrible accident like this happening in the future. A thorough investigation was undertaken and key learnings have been communicated throughout the group.
Brambles is committed to zero harm for our people and those we work with, for our customers and the communities we serve, and for the environment upon which we all depend. During the year, we launched the next phase of our Zero Harm strategy, Safety Differently. This initiative seeks to address the residual risk present in our operations. In conclusion, Bramble's is a resilient and inherently sustainable business. With our circular business model, superior network advantage and industry expertise, we're in a strong position to continue to create long term value and sustainable shareholder returns.
I'm proud to lead Bramble's high performance team as it's their vision, expertise and commitment that makes Bramble's the global leader it is today. Thank you. I'll now hand back to Stephen.
Thank you, Graham. I'll now hand over to Tony Froggart, Chairman of our Remuneration Committee, to discuss our remuneration policy in some more detail. Thanks, Tony. The questions are coming soon after remuneration report. Yes, on everything.
Good afternoon, ladies and gentlemen. Today, I'll cover four topics: how Bramble's executive remuneration is structured the outcomes for fiscal twenty nineteen, including share vesting, the proposed changes to the remuneration structure we are putting to shareholders during this meeting. And lastly, I'll provide an update on our employee share plan, MyShare. Before outlining the executive remuneration structure, I believe it's important to reiterate the key objectives of our executive remuneration policy. These are to attract and retain the right talent, to reinforce business strategy and to pay out for performance and results and the creation of shareholder value.
In keeping with these objectives, the Chairman and I met with proxy advisers and investors recently to seek feedback on Bramble's remuneration policy and the proposed changes to that policy, which I'll be outlining shortly. The feedback we received was that all our current policy was appropriate and aligned to our business strategy and that the proposed changes were consistent with those objectives. Now turning to how executive pay at Brambles is structured. There are two categories of remuneration, fixed and at risk. As you can see, more than 75% of executive remuneration is at risk, meaning it's only delivered if stretch targets are achieved.
The pie chart shows how remuneration would break down in a year where maximum targets were met. Fixed salary and benefits represent 24% of potential remuneration. Whilst at risk short term incentives or STIs, which are determined by a combination of financial results and the achievement of personal objectives, represent 44% of potential remuneration. Half of the at risk STI is given in cash, while the other half converts to shares, which are deferred for two years. At risk long term incentives or LTIs represent 32% of potential remuneration and comprise an award of performance shares with payout conditional on meeting stretch results over three years.
As you can see from the slide, a large proportion of remuneration is at risk. So I'll now run you through the remuneration outcomes for fiscal twenty nineteen. In 2019, Executive Directors received an average base salary increase of 2.5% with our company wide average for employees being 3%. Short term incentives for the senior executives reflected the performance of the company and applicable business units and ranged from between 3266% of the maximum achievable. Neither the sale revenue ROCE matrix nor the TSR components of the long term incentives awarded in 2016 vested as the conditions to which they were subject were not achieved.
Looking forward, the Board has set stretch targets for the 2020 STI and the fiscal year twenty twenty to twenty twenty two LTI sales revenue to ROCE targets, which is set out in the remuneration report. These have been set to challenge executives while ensuring that the targets do not in any way compromise investment in the future of the business. For the third year in a row, there was no increase in the Chairman's or Non Executive Directors' fees. There was however an increase in the fee supplement payable to members of the Audit and Remuneration Committees. These fees, have not changed since they were first introduced in 2013, were increased to AUD 25,000 per annum from the 07/01/2019 to align with the market and do not apply to the Chairman.
Each year, the Remuneration Committee carries out a review of Bramble's remuneration policy and structure to determine whether they continue to align with the company's strategic and business objectives and the creation of shareholder value. As a result of this year's review, two changes to the remuneration structure are being proposed. It should be noted that while these changes do not strictly need shareholder approval, your Board felt that in the interest of transparency, it is appropriate that shareholders are able to voice their opinion. These will be put to shareholders during Item six of the notice later in the meeting. As I mentioned earlier, the Chairman and I discussed these changes when we met with investors and proxy advisers recently and they were supportive of them.
The first change applies to the long term share awards. We are proposing to implement a one year holding lock on any vested LTI awards. These awards will continue to be subject to the performance conditions over a three year performance period, which I outlined earlier in my address. If LTI share awards vest, they will become available for executives to exercise and receive dividends. However, executives will not be able to sell the underlying shares until one year after vesting other than to pay any tax which is levied due to LTI share awards vesting or being exercised.
The practical effect of the introduction of the one year holding lock is that executives will not receive the full benefit of their LTI share awards for a period of up to four years, which brings the LTI plan in line with general practices in The UK and some major Australian companies. The second change relates to short term incentive share awards. As I mentioned previously, half of an executive short term incentives are received by way of deferred STI share awards. These awards vest two years from the date of grant. One of the effects of receiving deferred awards is that executives do not receive dividends during the two year deferral period even though they have an effect earned those shares.
We are proposing to provide at the end of the two year vesting period the equivalent value of the dividends, which would have accrued during that period on the underlying shares, subject, of course, to the awards vesting. Further details of these changes are in Section 2.2 of the remuneration report and in the explanatory notes of the notice of meeting. Turning now to our employee share plan, MiShare. MiShare is a global employee share purchase program, which encourages employees to purchase shares in their own company. Under the plan, employees are able to make a maximum annual post tax contribution of AUD 5,000, which will be increased to $6,000 from fiscal twenty twenty to purchase Bramble shares.
If these acquired shares are held by the employee for two years, they are matched one to one by Bramble's. And through MyShare, our employees now own 3,900,000.0 Bramble shares. So in conclusion, Bramble's remuneration strategy continues to support the business strategy and is designed to reward executives for the creation of shareholder value. The changes we are proposing at this meeting support that strategy. Thank you and I'll now hand back to Stephen.
Well, you, Tony, for a very comprehensive report. Ladies and gentlemen, before moving to the formal part of the meeting, I will now answer questions from shareholders. First, I would like to respond to the main topics and the questions raised by shareholders using the form provided with the notice of meeting. I'll get to the actual questions very shortly, Mr. Barker.
We received a number of questions on our remuneration policy and remuneration outcomes. I believe Tony has addressed the issues raised by those questions during his report. We also received a number of questions on our financial performance, which Graham and I addressed in our speeches. We received a question about board gender diversity, which I also covered during my address. And finally, we received a question about our carbon emissions and our sustainability goals, which Graham addressed in his speech.
Further details of our sustainability goals, which include goals for both carbon emissions and acquiring energy from renewable sources and our performance against those goals is available on our website and in our 2019 sustainability review, copies of which are available in the foyer. As I mentioned earlier, Sue Hallin and Eliza Penny sitting here in the front row from our external auditors, PwC, are in the audience and are available if any shareholder wishes to ask them any questions about the conduct of PwC's audit, their audit report, the company's accounting policies or the auditor's independence. Ladies and gentlemen, I'll shortly take questions from the floor. I remind you that only shareholders or their proxies or company representatives are entitled to speak at the meeting. If you'd like to ask a question, please approach the microphone, show your pink voting card or blue nonvoting shareholder card and give the attendant your name.
If you're unable to get to a microphone, please raise your hand and an attendant will bring a microphone to you. And to maximize the opportunity for all shareholders, I do request that you ask only one question at a time. Questions from the floor.
Mr. Chairman, introduce to you Mr. Peter Parker, proxy holder for the Australian Shareholders Association. Welcome, Mr. Parker.
Thank you for the opportunity to speak, Mr Chairman. Not only am I here representing the Australian shareholders, which represents retail investors, I'm also here holding a small shareholding in Brambles in my own name. When I'm speaking today, it will be on behalf of the ASA, except where I clearly state that it is my personal thank Okay.
You in your introductory talk, you mentioned, and again, just briefly ago, talked about the need in the Board for gender diversity. I think that, that should be a case of general diversity across all aspects, gender being an important one, but all skill we need to have a lot of skills in the Board. I think that the Board is in such a situation now, and I understand that there's changes to be made which will make it even more diverse by perhaps reducing the amount of financial experience on the Board, the more technical. And that is indeed happening with the appointment of Mr. Jim Miller.
The other aspect is the and if you give me a moment, Mr. Chairman, to talk about the buyback of shares. I know from meetings of the ASA, there's a lot of retail investors don't quite understand the impact on shareholders of reduction in shares. And because those shares are bought back by the company and, in effect, written off the books, that means there are less shares, which means each individual share which is currently being held by a shareholder is worth that much more, both in terms of the percentage of profits that those shares will attract and also the value of assets in the company. The other matter is the dividend policy.
I understand the reasons for the policy being such that you'll tie those more to a percentage of the profits rather than a fixed amount. I see that as a very eminent policy. And that it's something that might, though, for some retail investors who rely very heavily on the income, mean that they're going to have flexible incomes. So there is a downside to it. And one final thing, Mr.
Chairman, I'd like to commend the Board on its capital management in terms of the proceeds from IPCO of applying them in a way which is a sensible way. It would be so easy, as many other companies have done, to embark on grandiose acquisitions, which have turned out, in a lot of cases, to have burnt a lot of shareholder equity. So again, I commend you and your fellow Board members for the approach that you've taken.
Well, Barker, thank you very much. And you raised a number of very good points, mainly observations actually rather than questions, but I'd certainly like to respond to them in order that you raise them, not necessarily in order of importance, but certainly the way you've raised them. I agree with 100% with you about diversity on the Board. Gender diversity, female representation is only one aspect. I think we have achieved that diversity over a period of time in an extremely well thought out way.
We're an international company, as I said before. And as I think shareholders know, we're in 60 countries around the world and all the basically all the continents, and I think we need to reflect that on our board. Our two major markets are North America from a profit point of view, North America and Europe, which is Continental Europe and The UK. And we have two directors, including David Gosnell, who's as you know is retiring, we have two representatives from United Kingdom. We have three representatives from North America.
We have four non executive directors from Australia. And of course, our two executive directors, Graham and Nessa reside in The UK. So from geographic diversity point of view, I think we're very well represented. From the diversity in terms of skill sets on the board, I think we've also well represented. I noted your comment about finance guys.
I'm a finance guy, so I'm not such a good idea to have less finance people, but generally, but I think it is actually on our Board. We used to have, when Carolyn Kay was here, four finance people on the Board. We now have three. And I think that's a good balance, given the needs of the Audit Committee and financial matters, which the Board considers on a regular basis. But we have tremendous expertise in relation to the businesses that we serve, our customers in the FMCG business, retail business and the like.
And you've no doubt read the bios of our various directors. So I think we have excellent diversity in terms of the skill sets on the board. And gender diversity, I'm very much in favor of that is only one of the aspects, but it is very important to us. So we now have three female directors out of 11 that if you do the math, it's 27%. I'd sort of tend to round things up and say it's 30% where our objective was.
When Carolyn was on the Board, we had 40%. And we now have two positions that we will be recruiting for over the next year. And whilst we will always seek, as we did in the case of Jim Millett, to get the absolute best candidate we can, Certainly, the opportunities for increased gender participation in the Board are there for us to undertake and to achieve. And going back to 40% is a necessary goal either. I think the best candidates, but if we can find more excellent female directors and we go beyond the 40% number, I personally would be delighted, and I'm sure the rest of the Board would be as well.
So I think I agree with you, and I think we're in a also I think that we're in a very good place. You described the share buyback and the way shareholders benefit from it very well. I don't think there's anything I can really add to that, and thank you for that. The dividend policy is something we've been considering for a long time because we do understand that Retail shareholders, in particular, are looking for a fairly well, no surprises. We'd like not to have surprises, have continuity in income stream.
We have had in the past years a policy whereby we either maintain the different level or increase it, depending on the financial performance of the group and the financial requirements of the group. But the difficulty is, and the point I think we all have to realize, is that we, as shareholders here today, are not investing in Australian just purely Australian company. We do have the CEO of our Australian and Asia Pacific business here, and it is a very important business for us. It is the springboard for Bramble's becoming what it is today, but it represents about 7% or eight percent of our revenue and about the same of our profit. And the majority of our profits come from other currencies, particularly U.
S. Dollar, euro and sterling. And The U. S. Is our major market in profit terms.
U. S. Is our major currency. U. S.
Is what we actually report in. Everything that Graham and I talked about today was U. S. Dollars, 1,650,000,000.00, U. S.
Dollars 300,000,000, etcetera. And so we are looking at a U. S. Dollar company. And I think this is a benefit, a negative for shareholders to appreciate that we have diversity, not just on the Board, but we have diversity in the currencies and the geographies in which we operate.
And so it just is a logical thing over time, and I can't tell you whether it's going to be good or bad in Australian dollar terms. But if we continue to support and to perform satisfactorily and we report in U. S. Dollars, our dividends, therefore, with any profit growth should be growing in U. S.
Dollars. Capital management acquisitions, yes, I think that Graham just made the point, which we've as a company made before, that we are intending to achieve sufficient cash flow out of our business to cover CapEx, which funds future growth as well as to cover our dividends. I've made the point once or twice in my address that we have a very good investment grade credit rating. Are seeking to maintain that profile. And we're very disciplined in the allocation of capital.
We want to be as disciplined as we can be. I think that's a major, major plus. And so the proceeds which we received from the Iphaco sale, if you like, surplus to our operating requirements and should be used appropriately for the benefit of shareholders. And so that has been properly articulated, and you, in fact, repeated that, and I appreciate the fact that you did. So thank you for your observations.
I'm sure you'll have some questions when we get around to remuneration, but I do appreciate it. Thank you. Are there any other questions of a general nature? When we get to the actual items of business, you'll be able to ask questions on those specific
Mr. Chairman, I present to you Mr. Edward Warden, shareholder.
Good afternoon.
Thank you, Mr. Chairman. I was listening, I heard the mention of Brexit. I hear that's a bloody mess. And I hear that what's going on between China and The USA, and that's a bloody mess.
Can perhaps you and Mr. Chipchase give us some sort of indication of what's going on from a Brambles point of view, so we keep it to Brambles, and what we're doing to try and overcome any problems that we see may arise from both of those instances. Thank you very much. And I'll come back for another question, Aladd.
Thank you. Well, I won't sort of add to your political view of where Brexit and the China U. S. Trade talks are going. And Graham did mention Brexit as in his CEO address.
We, as a Board, have been very interested and concerned about where Brexit is going as it affects us as a company. Clearly, we have a major operation, as I said, in Europe and UK. And it's very hard to anticipate exactly what the financial consequences will be until we know what the results of a deal or no deal will be. But however, and Graham may wish to comment, I think if you invite him to comment on that, that our management team have been making progress on Plan Bs and Plan Cs as to what we're going to do. We have committed to various capital expenditures in order to put ourselves in a position, which would and I won't bore you with some of the details of how it might affect the supply chain activities, but it will affect those.
And we're taking precautionary steps in order to cope with that. And if there is a deal, some of those steps may prove to be unnecessary. But nevertheless, they're very important. But Graham, would you like to Yes. Add a bit more detail to
a couple of things, I guess. Number one, when we look at Brexit, it's important to recognize that only 10% of the flows in Europe are going from The UK to the rest of Europe. So it's an irritation getting a lot of them at airtime, as you know. But in terms of the overall European business, it's not a big issue. What we've done so far, number one, is talk to a lot of our customers because clearly they're facing, the same sort of issues.
And from a practical term, we've had to put some more capital expenditure into the business because what's happening is each time a deadline comes up, which is becoming increasingly regular, as you know, then people are stocking up because people are afraid of shortages of products. So we have to put more capital in to support the inventory build, but then of course it unwinds. So it's a temporary thing. The more permanent thing we've had to think ahead on is, for some reason, when The UK comes out of Brexit out of the EU, the bugs we have in The UK all of a sudden become very, very bad as opposed to being okay when we're in the EU. So, a pallet that goes from The UK into Europe has to be heat treated when we're out of the EU, whereas when we stayed in the EU, didn't matter.
So what we've had to do is invest under $10,000,000 of capital just to have heat treatment in some of our UK plants. So that's something we thought ahead on and have started affecting. The bigger issues, which we can't really predict, are what's going to happen around tariffs. And longer term, I think we can manage all of those. So for example, if a lot of our pallets were coming into The UK today from outside, because of being manufactured and purchased from outside The UK and they had tariffs put on them, if that became uneconomic, we'd have to develop timber sources in The UK and make the pallets in The UK.
So it's manageable, but it's not something we think we have to do just yet. The more the broader impacts could be a no deal Brexit could affect the GDP in The UK, which again could affect our business. Now this is a similar point to the China U. S. Trade war potential.
So if that were to happen, I think some good points and bad points for Brambles. We don't ship on our palates much product going between continents. So to the extent that The U. S. Wants to have a fight with China, it wouldn't affect us so much purely in terms of cross continental trade.
However, something like that and something like Brexit could affect the GDPs and the economic growth in all those countries. And so Australia would clearly be affected if the Chinese economy was affected. So that obviously could affect our business. The good news though for bran boards is if you think about what goes on our palates, it tends to be food, drink and consumables. So by and large, people will eat and drink in good times and bad.
They may trade up or down in terms of brands, but they'll still be eating and drinking. Therefore, the volume on our palates tends to be it goes down a bit, but it doesn't go down as much as if we were shipping lots of luxury goods on the palates. So we are protected a little bit from sort of global downturns. So that's kind of our view. But clearly, if I knew what the results of Brexit would be, I'd be not here.
I'd be somewhat in some casino in Las Vegas making a lot more money. But, impossible to tell, but we planned, I think, as best as we can.
Thank you, Graham. There's a question here. Thank you.
Mr. Chairman, I'd to introduce you Yvonne Chan, shareholder.
Welcome.
Thank you, Yvonne. Thank you. Good afternoon, Mr. Chairman, Yes, and good afternoon, I have 1.5 questions, if I may, please.
1.5 questions? Yes. Okay. Could you start with the half first and
I would. When you mentioned the investment grade, there's a well, I don't know what that is. Is that the BBB or
We're BBB plus.
Okay. Thank you. That's done. Now my next question is and I've been a shareholder for quite a few years. And when Ramble was have more than well, started off from the Chappellers and then diverse to others other businesses.
And now back to Chap. I like yes, it's a good idea that we stick to our meetings. The next thing is I wonder, when we streamline the business like so, do we also streamline the Board? I mean, do we need the Boards of this size? That's my question.
Thank you very much. Just going back in the history a little bit. Brambles, well before my time or before the time of most people here, was a conglomerate with many businesses, and was one of them. And CHEP was bought in the Brambles goes back to 1875. But anyhow, that's not relevant today.
But in the 1950s, the company bought the business from the Commonwealth Government. CHEP stands for the Commonwealth Handling Equipment Pilgrims, and the Commonwealth government privatized and sold it to us. And it was one of many businesses in the company and was by no means the major business. But over the years when Brambles has developed Chek into what it is today and taken it internationally into the Northern Hemisphere and so on, it has become the dominant business over time. And indeed, when I joined the Board, we still had Clean Away and we had Recall and we had Brambles Industrial Services, all of which were sold and the proceeds did go back to shareholders.
Most of the proceeds went back to shareholders back in 2005 and 02/06 or 02/07. So recall Ithco, should I say, was bought some six or seven years ago and is it was an important part of the business. But it was only about 15% of our revenue. That's relevant, and that's material, but check is 85%. So let me say that in streamlining the business, focusing on the advantages of being able to really concentrate on what is important, CHEP has higher margins than Ifco.
CHEP has a higher return on capital than Ifco. CHEP probably in the long term has better growth potential and better growth opportunities, even though I have to say, and that's why we got a good price for RIFCO, it in its own right, may be inferior to Chip, but certainly is a very viable and attractive business, and that's why we got a good price for it. But we are administering as a Board, and Graham and his team, Nissa and the team, executive team are administering a very big business in over 60 countries. I think we have about 14,000 employees. We have all these seven fifty service centers around the world.
So it's a major business, and I think that the Board is an appropriate size for doing that. We as I said before to Mr. Barker's observation that we have diversity in geographic sense as well. We want to have representatives who live and breathe and work in the Northern Hemisphere, in Europe, in The U. S, Canada and so on.
And so I think the Board composition is fine. I think the skill sets we have on the phone, and I think the size is pretty good as
well. Are
there any other questions? Yes. Thank you.
Mr. Chairman, I introduce you, Mr. Eric Chan. Hold on.
Mr. Chan, welcome.
Hello. Good afternoon. May I ask, since you raised the history of Brambles, and I am one of the long term shareholder, and I remember Bramble had a deal listed with UK.
Yes.
And there was a disaster time where we lost millions and millions of pallets. Are you aware of that?
I certainly am. Fortunately, I wasn't on the board when those pallets were lost, but, yes, I'm looking at I think the history I'm sorry? Need to That's find true.
Did you manage to find them was my question.
That's your question.
No, no, no. Still follow-up, but a good question raised. Did you manage to find them? Well,
let me address the question properly. That, we have a business, which is the share and reuse model. Our pallets go out into the economies where in the jurisdictions where we're operating. And we do have very active programs to get our pallets back. There are a whole range of activities in which we do that.
We certainly do lose pallets in the ordinary course of business. We get in some jurisdictions, like in Australia, we get 100% compensations for people if they lose their pallets. In some of the other markets, we get partial compensations. And where we don't get partial compensations, obviously, therefore, we have a loss in our profit and loss account. We make a provision every year.
It's called IPEP, which is a provision for equipment, which is pallets and other containers that we feel may not be recovered over time. So it's reflected in our profit results. We need to have an appropriate pricing mechanisms and incentives for our customers to return the pallets to us or to tell us where we can go and collect them. And we're and this is a very active program, quite a complex program. It's different in all the different markets as to how we go about collecting our pallets.
Yeah. That comes to a point where I believe a few years ago, there was a company that be the chopped pellet by in this other in company, and they claim that the pellet is theirs. I think it's something like keep finders keepers or something. They keep they they keep that pellet, and there was a huge number of pallets ended up with them, and there was a court case. I didn't follow the details.
And how is it? And also, by the way, can you just outline what's the acceptable number of pallets that are lost today compared to those years gone by, which is obviously not acceptable?
Firstly, it's important that wherever we operate, we determine that we will make sure that we determine that we have appropriate title and ownership of our palates. And there are often, I think, fair to say litigation, which people undertake in order to try and do exactly what you say, finders keepers, and then want us to pay them to get our pallets back. But in all the markets that we the major markets we're in, we have established the ownership credentials that we have. And overall I can assure you and other shareholders here that the ownership issue is not a major problem, but it's something we're well aware of continue to remain vigilant and look after our interests and certainly when we go into a new market, into a new country, we take important measures and steps to assert our right of ownership. So that is important, but I think the other issue is that In many markets for example The US there are people who go about around and call recyclers who go and find our pallets and return them to us for a fee There's often an argument about what that fee should be but nevertheless, that's something which we've dealt with and managed for over a long, long period of time.
And can you tell us what are the number of pedestal lost today?
What, Graham? About Graham says 9%. Was going to say 8%. About 9% of the Palacel are lost today, and half of those, by and large, we get compensations for, and the other half, we have to provide for out of our profits.
So you consider that as an acceptable figure? A which figure? Acceptable?
Acceptable figure. We'd always like it to be less, and we take a lot of actions in order to reduce it. But that's the cost of doing business. Are there any other questions from the floor at this time?
Mr. Chairman, a further question from Mr. Peter Barker, shareholder and proxy
And then ir comes apart from the the court ordered combination of the two separate suits into one, has there been any further developments? And has and I know from our previous discussions that you said that Brambles was very confident in the result of that being favorable to Brambles. But in the event that it was not favorable, has there been provision made for that?
Mr. Parker, thank you. There's nothing further that I can report at this stage. As far as litigation goes, I think it's fair to say we're in the discovery phase or towards the end of the discovery phase. And we have an insurance policy.
The insurers have acknowledged the appropriateness of it for this matter. So there's really nothing more I can say at this stage. I think there's another question over here.
Mr. Chairman, a further question from Mr. Edward Warden.
We'll get to number two over here in a second. Mr. Chairman, I was around
in those days, I used to work for one of your competitors. Basically, your Ness' one of Ness' predecessors informed me that in Australia, we have a higher system. And overseas, it's a pay a service fee, and it's our responsibility to collect the pallet. But that was a big problem where we had a Chairman, a predecessor Chairman to yourself, who didn't quite understand all those things. So I'll leave that as at that point.
So if somebody wants to ask me more questions, I'll actually work against you. And in most of the areas, actually, in the Clean Away area, not so much in the Recall and in the Pallets, but we weren't that big in those areas. But anyway, my area of questioning generally is safety. And I note that we've got a new sort of measure for safety this year, but our safety record has actually failed to some degree. We've gone backwards.
We've gone from five to 5.9. And I take the point that we are measuring somewhat differently, but what went wrong? And we have a death, and I hope that in our you might ask Mr Froggett, in terms of our remunerations, I noticed safety is a very much a thing, I put one of the personal targets of people. I hope that we have, and Mr Progut might like to answer this through you, Mr Chairman, have our employees that were responsible for these failures been, for want of a better word, penalized in terms of their short term and long term incentives being cut back. Thank you, Mr Chairman.
Well, thank you. And I just want to reiterate, and I'm sure I'll get Graham to say some more on this subject because safety is extremely important to us We are devastated by the fatality. It's and it's a shocking event. We're doing a lot in Spain to support the family and that's ongoing. And of course, there is our own investigation, also police investigation underway at this stage.
But safety is extremely important. The Bifa, which is the Bramble industry frequency rate, which we use, which includes near misses as well as injuries is important. It's already at a low level, and it's so the bar is very high, if you like, to achieve that. But I don't think it's we're ever satisfied that we have what we've actually said, what will satisfy us is zero harm. And that is the objective.
We may never get we will never get to zero harm, But that is the aspiration and that is the intention, and that is exceptionally important for us. Before I ask Graham just to do that, and I'll answer for Mr. Froggart on that, is that the executives the safety metric is in the short term investment short term plan, STI plan and incentive plan. And even though it happened after the financial year, happened July, the senior executives and the executives involved were penalized, including Graham Chisholm himself. So that was the thing.
But Graham, would you like to make some more comments on safety more forward?
Yes. So if you look at the the, incident frequency rate, right, it has come down a lot over the last few years, and I think there was an element of us thinking that we were good, but I don't think we can say that. Mean clearly, can't because of what happened in July. And I think for me, coming from a different industry before here, the big step, because I think we've done a lot in terms of giving people protective clothing and guarding some of the equipment, but it's now about changing behaviors. So again, you obviously know a lot about safety in terms of the Dow and DuPont type of process to improve behavior so that people are not just thinking about safety when they come and start operating a machine.
Are thinking about safety when they get out of bed in the mornings, when they start doing things at home, when they get into their car, when they come to work. And
they're
not just thinking about safety as it affects them as individuals. They're thinking about safety as it affects the people around them, both at home and at work. We've got to change that culture to get a step change in performance. That is where we've now launched the Safety Differently program. I think it's going to take quite a lot to make that really part of the culture of the company.
It takes a while. But I think what has happened in the last few months has, I think, given everybody a wake up call because that plant in Spain had an excellent safety record. In fact, the employee who unfortunately was killed was interviewed five or six years ago saying what a great safe plant it was, and we showed that to the rest of the company. That is a real punch in the gut. And I think it's brought it home to people that however safe you think you are, there is still a lot of risk out there.
We've got to try and not just stop accidents, you've got to prevent the risk happening in the first place. That's what we're trying to work on.
Graham, thank you for that. So microphone two. Mr. Chairman, I have Robert Abel, a Retailer shareholder. Welcome.
Thank you very much, Mr. Chairman, for a very interesting and informative meeting. I have one observation and a question. I think having the meeting at 02:00 in the afternoon is a great idea. It gives perhaps people from outside Sydney a chance to get up here.
I came from Canberra on the train today. I shall go back to Canberra on the train today, and I've enjoyed every minute of being in Sydney and having this meeting at 2PM. I'm a long term shareholder in Brambles. It's the first time I've been able to come up to Sydney and come to a meeting like this. Two o'clock in the afternoon is a very good time.
Many companies have their meetings at 10:00. People like us can't get up here unless we take a 06:00 plane from Canberra. My question is, we've heard a lot about the pallet industry today. Do you have any competitors? If you do, how do you rate against them?
And what percentage are you in terms of the pallet industry? Are you 50%, 60%, 20%? Could you tell us something about your competitors, please?
Thank you. First of all, thank you for your observation, welcome, and we're delighted that you could make it here this afternoon. Yes, of course, we have competitors. So we have to have competitors. Otherwise, we're a monopoly.
Otherwise, we wouldn't be held to account. Otherwise, we wouldn't be as good as we are today. And I think our competitors are all good. None of them in almost every market we're in, none of them are anywhere near as big as us nor as well represented, don't have the network advantage that we have. Graham, if you heard or remember good parts of Graham's speech, a part of Graham's speech, he talked about the fact that our competitors have been good, but they're also being rational.
And that's something which makes it, I think, better for all the users of our supply chains that there are rational competitors around. In Australia, I think Philip Austin here runs our Australian business. I think we're probably over 80% of the market close to 80% of the market. So that's pretty big. We have one major competitor here called Loskum.
I don't know is that Loskum who you work for? But so and Loskum have been our competitors under different ownership guises for forever, as far as I can remember. In The U. S, we have a number of competitors, none of as big as us, none of them have the same network advantage and spread of service centers around the country. The biggest of our competitors is Peko.
It's a well run company, been there for years, now has got to the last three or four years is under different ownership, who are very effective and actually have quite deep pockets and got a strong balance sheet. And they are a formidable competitor, but we are, by far, the biggest operator there. Probably only and in Europe, we have a number of competitors, but we are the biggest, I'm not sure, U. K. What part of the market would we have, Graham?
It's about 70% of The U. K. Market. So if that gives you a flavor for our very large position in all these markets, which is actually fascinating for me and hopefully for shareholders generally that, an Australian company going international then becoming truly global is by far the major player in almost every market that we operate in. So that's really quite an achievement for a company like us coming out of Australia.
I think the only area where we are not the major player is in Southeast Asia and in Asia more generally. We've been in China now for twelve, fourteen years. And Loskum is there, which is now owned under this ownership, owned by one of the state owned enterprises there. But neither of us are very big there because the market really hasn't taken off for sophisticated supply chain activities such as ours, which require pallets and the sort of services we provide to the supply chain. And but we are in some of the Southeast Asian countries where we are not the biggest player, but that's a relatively small market.
Are there any other questions before I can move on? Thank you very much, and I appreciate the questions, the interest to both questions and observations. We'll now turn to the items of business. Before doing that, I'll just go through voting. All voting items on the agenda will be proposed as ordinary resolutions, and I'll now explain the voting procedure.
If you're entitled to vote, you'll have been given a pink voting card. As stated in the notice of meeting and on the shareholder voting form, I will be casting any discretionary proxy votes that I have been given in favor of each of the items of business. The proxy and direct vote position for each resolution will be shown on the screen. And at the conclusion of the meeting, please place your completed voting cards in one of the ballot boxes that are located back there by the exit doors. We'll announce the poll results of the ASX later today and also post them on our website.
Stacey Spence of Boardroom has been appointed Returning Officer. So now the first item of business is to consider and receive the financial report, directors' report and auditor's report for Brambles and the group for the year ended thirty June twenty nineteen. Are there any questions on this item? If not, I'll move to Item two. Item two asks shareholders to adopt the remuneration report for Brambles for the year ended June 30, which is contained in the annual report.
You've heard from Tony Froggart on our remuneration policy, and this included the principal issues raised by shareholders on this topic in advance of the AGM. Are there any other questions on the remuneration report?
Mr. Chairman, a question from Peace Barker.
Welcome
back, Mr Barker.
Yes, Mr Chairman. The Australian shareholders will be voting any open proxies against this resolution on three aspects. First of all, in relation to the lengths of time taken before shares vest, our policy is that, that be a minimum of four years for long term incentives. The three years and lower is seen too short of time to compare the performance of the company over that time and also to encourage short term vision and achievement of results just in the short term rather than looking at the longer term. That's one thing.
The fact that the short term and long term incentives are held up for or held for a further twelve months, the benefit still flows through to the recipient, whether it be by dividends paid at the time or deferred. Nevertheless, it flows through. The only risk is the share performance in that time. The second point is in relation to the CEO, who the who, as explained in the annual report, holds a directorship in another company, an English company, and in fact, is a member of the Audit Committee. Now our view is that
No, he's actually Chair of the Remuneration Committee. Sorry,
yes, Remuneration Committee. Thank you for that. I had got that wrong, obviously. Our view is that the role of the CEO is a full time one, that his attention or her attention should be fully 100% focused on the performance of the company in which they're in charge of. And that any external significant activity, such as a Director and, in fact, a Chairman of a subcommittee, is taking away from the ability to perform as CEO.
The Okay. That's that point. The other one was that the incentives, at least the part based on total shareholder return, is a measure against the comparator group, both within the ASX and also a world index. And to start receiving short term incentives, the performance has to be such that it'd only be equal to what the median level is. In other words, if half of the companies receive if Brambles does better than half the companies, then short term incentives are being awarded from that point up to a maximum of 75%.
That could be a case that the total shareholder return is negative, and there will still be short term incentives awarded. So those are the three points, Mr. Chairman.
Well, thank you, Mr. Barker. I appreciate the comments, and they're well put. And they're not a surprise because they're consistent with the ASA over a number of years, and we're well aware of them. First of all, before answering specifically, we think that our remuneration structure and Tony might want to embellish my answer here and add to it, that we believe our remuneration structure is fit for purpose.
Actually, more than that, it's industry leading really in Australia. We've taken a whole lot of over the years, initiatives to make sure that the remuneration policy serves the purpose of shareholders as well as being fair to our executives. We undertake a major review annually of the structures of our remuneration. We do this with our external consultant. And if we believe that we're out of line with general industry practice here, we would change.
And indeed, the two changes, which we'll be voting on later in this meeting, came out of our annual review this year. They weren't actually things which we thought or which were told by our investors were essential, but we felt that they were initiatives that would further enhance the structure of our remuneration and make it absolute best practice. So with the first point that long term incentives, where the ASA position is for four years, vesting analysis for three years. We've now added a year for as a holding period, but not as a vesting period, which I know you appreciate, and you made that point. More than 80% of the companies in Australia use a three year or follow a three year vesting period.
So we're not out of line with general market practice here. We think it's appropriate when we do our long term strategic planning, we look into the future beyond three years, but the actual financial projections that we make, which we think are relevant at a Board level and relevant at a management level, three years, a one year budget plus two years of financial projections beyond that. And we think that's the right period of time, and we can consider continue to consider that's the right period of time. And so I respect the ASA's position. As I said before, you've been very consistent in that regard, and we've been consistent in saying that we've just unfortunately, you have to agree to disagree on that point.
As regards Graham's involvement with AstraZeneca, some things which people think are a negative, others think are an advantage. And we think it and I personally think it's a great advantage having Graham being the Senior Independent Director as well as the Chair of the REM Committee, AstraZeneca. It's a major global company like domiciled in The UK. And the insights which he gets from this public company and from seeing what goes on there are very important. And I think it's relevant to make a more general observation that when you have a senior manager, a CEO, a general manager of a business unit, even with a very large P and L, large profit and loss, it's a very different situation than actually running a public company.
Public company is the next stage up. And if we can actually have our senior executive with that exposure and just to be clear, Graham was a Director of AstraZeneca before he joined us, and we had a clear understanding that he would we would like him to continue, and he wanted to continue in AstraZeneca subject to it not impacting on his ability to perform effectively as a CEO of Brambles. And so that continues to be the case. But it's a major advantage for us that he has the exposure of another public company, and they can bring that wisdom and that experience to the management of Brambles as a public company as distinct from operating the individual business units of the company. So I understand the position.
There are some people who say, no, it can only be 100% in the company that you're employed by. But I think and I'd say this respectfully to the ASA, to have a broader vision as to what it is to manage a global company in 60 countries with 14,000 people and but and going beyond that in being able to deal with investors, deal with authorities, with all the different stakeholders and have the corporate wisdom to be able to run a public company, which I think I believe personally and my fellow directors believe Graham is we get the benefit of Graham's exposure to AstraZeneca. As regards, I think the final point of total shareholder return, the TSR, as you correctly point out, it's 50% of the LTIs, 25% is the local comparative group and the 25% is the international group. There's always a debate about whether it should be relative TSR or absolute TSR. And the absolute TSR is, I think, where you're heading that if it's a bad year and it was negative, then why would executives get any benefits out of that?
But do you grab that?
No, don't want to
So I just want to make the point that it is a matter of a discussion. Some people believe relative is the appropriate one, which we do. Other people such as ASA believe that absolutely.
I just add something? Sorry. Thank you for your comments. As always, we listen very intently to the ASA. I must say I was personally disappointed with your view on the three year plus the holding lock because we had you in mind, particularly in terms of your concerns.
As Stephen rightly pointed out, the majority of ASX one hundred companies still work on a three year program. And we mustn't forget that the three year is a rolling situation. It's not something that is static. So you're constantly looking at three year terms that go along. Always very difficult to look beyond three years in terms of where we're going in terms of responsibility and accountability.
But we put in the holding lock based on what we saw in The UK and starting to come in here because one of the ASA's concerns, which we understand was that they wanted to see my understanding was you wanted to see management having skin in the game as much as investors and we understand that and that's why we put it in. And so I think it's important to note that whilst the performance period is the three years, we have that as a holding lock in order as much as anything else to make sure that management do ride with the way the share price is going, but also there is a clawback potential. So I think to me, it answered all your questions. So I was a little bemused, I have to say, when I heard that you were opposed to it. I hope going forward next year, you may have a different view on that.
I think the other point I wanted to make also just to add to what Stephen said on TSR, which is what you were talking about, the relative shareholder return. I think it's worth noting that, that has not you were I think talking about short term incentives and although short term incentives move towards helping with shareholder return, TSR is a three year, this is the long term. So it might be a little bit confusing there. But certainly, it has nothing really specifically to do with the short term incentive. It is a long term incentive program.
I hope that helps.
Thank you, Tony.
Mr. Chairman, I don't want to debate the matter now. Not the appropriate forum. But if you just let me make one comment in response to the 80% figure, I believe, you said that Australian companies used for We're using three years. That is a falling number, that it was much higher than that.
And that I believe it's partly due to the ASA, its efforts And also, I believe, the recognition of those other companies that four years is a more appropriate period.
Thank you. Thanks, Mr. Barker. Any other questions on the remuneration report? No?
Well, thank you. The resolution and the direct vote and proxy position are now on the screen. And I'd ask you to please now mark your voting card for Item two. Have we had enough time Thank you.
Item three is the election of Jim Miller as a Director. Jim was appointed as a Director on the March 15. And as this is the first shareholders meeting since his appointment, he now stands for election. Jim's biographical details are set out in both the notice of meeting and the annual report and his election is unanimously supported by his fellow directors. I'd now invite Jim to speak briefly on his election.
Thanks, Jim.
Thank you, Steven, and good afternoon, everyone. I'm delighted and honored to be, to stand to the election, as director of Brambles. In addition to Brambles, I'm on the board of directors of Wayfair, a U. S.-based e commerce company, where I'm also serving as the interim chief technology officer. Additionally, I serve on the Board of Directors of The RealReal, a U.
S.-based e commerce company, and serve on the Board of Directors of two private equity owned companies, ITRenew and Bloom Global. Additionally, I'm a member of the MIT Corporation, the Board of Trustees of the Massachusetts Institute of Technology. I also advised a number of nonprofits, universities, technology companies and senior executives. I was the Chief Technology Officer at a technology startup called Aribo Incorporated. Previously, I ran the worldwide operations for Google, where I had responsibility for procuring, building, deploying and operating Google's worldwide cloud and technology infrastructure.
Additionally, I was the Managing Director of Google Energy LLC and had responsibility for sustainable sustainability and corporate social corporate social responsibility at Google in addition to a number of other responsibilities. Additionally, I held executive roles at Cisco, amazon.com, Intel, and international business machines in operations, supply chain, and general management. If elected, I look forward to putting my global experience gained in the Asia Pacific, Europe, and The United States market in the areas of general management, strategy, supply chain management and operations, information technology, digital transformation and analytics.
Jim, thanks very much. Are there any questions? Mr Barker?
Not so much a question, Mr Chairman, but just a brief comment that, as I alluded to earlier in this meeting, that the skills that Mr Miller brings to the Board, those technical skills and experience, we welcome him on the Board and think it will improve and strengthen the Board's capabilities.
Thank you very much indeed. I think there's another question here at number one.
Mr. Chairman, Mr. Edward Dallergen.
Thank you, Mr. Chairman. I note Mr. Miller has very clearly admitted that he's working full time as an information officer on a firm he is now a director of. Can we do explain how you were getting around that problem?
Because I note in the notes, it says it's only going to be temporary, and it might be three or four months. But I don't want somebody full time somewhere else if he's going to be one of my part time directors. Can you explain how you're overcoming that issue? I actually think Mr. Miller's CV is very good, and he's exactly the sort of person I think we want.
But I have a bit of a problem in understanding how we get around that
situation. Well, the answer will be very brief. First of all, his CV is phenomenal for a company like us, and we're very, very privileged and pleased to be able to have him. He was a nonexecutive director of Wayfair and is a very temporary position of a few months. And we don't have to overcome anything because it's a temporary position for a few months.
It's actually a compliment to him that a very successful online company turned to him to try and not to try, but to fill a casual vacancy. Are there any other questions? If not, I'll revert to the voting part of this. The resolution and direct vote and proxy position are now on the screen. Please now mark your voting card for Item three.
Thank you very much. I think probably we can move on now. Item four is the reelection of George L. Sogbe. So on my left here, his election his reelection as a Director.
His biographical details are set out in both the notice of meeting and the annual report. George has been subject to an assessment process by the Board, and his reelection is unanimously supported by his fellow directors. And I'll now invite George to speak briefly on his re election.
Thank you, Stephen, and good afternoon, everyone. I'm delighted and honoured today to stand for reelection as a director of Brambles. Beside Brambles, I serve on the board of the Kraft Heinz Company. It's a global food and beverages organization based in Chicago and listed on NASDAQ in New York. I also serve within the company as an adviser to the CEO and the Board.
I serve also on the advisory board of Altimetric, its data analytics and digital transformation organization based also in The United States, where I'm located. Prior to Kraft Heinz, I was the Chief Operating Officer of Kraft Foods, the Kraft Foods Group, based in The United States. I also worked for the company in Australia and New Zealand where I was the Managing Director of Kraft Foods before moving to The United States. Also in Australia and New Zealand, I worked with the Fonterra Group in global and general management capacity of the Australian retail business. I look forward to continuing if elected or if reelected.
I look forward to continuing to put my experience, which is based on global markets, including Asia Pacific, The United States, Australia, New Zealand, as well as areas like general management, strategy, operations, sales, marketing, to further the interest of shareholders of Brambles. Thank you very much.
George, thank you very much. Are there any questions? Mr Barker?
Well, again, a short comment to indicate our support for Mr. Zogby's reelection that, yes, he obviously has the experience and skills involved with the consumer area, one of the significant part of Bramble's business. And so we think he brings considerable value to the Board.
Thank you very much. Are there any other observations or questions? Okay. If not, the resolution and the direct vote and proxy position are now on the screen. And I'd ask you now to vote to mark your voting card for Item number four.
Right. Now moving to Item five. Item five of business is the reelection of Tony Froggart as the Director. His biographical details are set out in both the notice of meeting and the annual report. Tony has been the subject of an assessment process by the Board, and his re election is also unanimously supported by his fellow directors.
I'm now invited by Tony to speak briefly on his election or re election.
Thank you, Stephen, and good afternoon again, ladies and gentlemen. I'm privileged to have been a member of the Board over a number of years. And over that time, I've experienced the challenges and the successes of being part of a truly impressive organization. I believe that my background and experience in working for leading global edge global businesses culminating as CEO of a multinational FTSE one hundred company has enabled me to make some small contribution to Brambles over the years of my involvement. I take real pleasure and enjoyment in working on the Board of a company that is a global leader in its field as well as being inherently Australian in its heritage.
Working with a board of this caliber, with its multiplicity of skills, is a continual inspiration. And if I'm fortunate enough to be reelected to the board, I will do all I can to work hard on your behalf and provide all assistance to the new Chair before I depart the Board during the current term. Thanks very much.
Tony, thank you very much. Are there any questions or observations, Mr. Barker?
Yes, briefly. Again, yes, we support the reelection of Mr Progut. Again, for the skills, the corporate knowledge, in particular, that you referred to in positioning a new Chairman in the Board. However, our consideration is that a Director who has been served four terms or equivalent of twelve years on the Board is no longer independent, that they are too closely aligned with the operations of the company. So yes, we will support Mr.
Reelection as a Director, but as a dependent or nonindependent Director.
All right. Well, first of all, thank you for the observation about Mr Froggart's capabilities, which I fully endorse. Very pleased that you're supporting his reelection. But let me just say that I don't know anybody who's more independent than Tony. You can have a formula.
You can go off ten years, twenty years, fifteen years or whatever. And but Tony is independent in character, independent in mind. We, as a Board, anybody, me included actually, who have been on the Board for more than ten years, there's a process that the Board goes through to confirm and reconfirm and reaffirm that Director's independence, and we did that with Tony, and that was a proper review and examination. And I'll just make the other point that during Tony's time on the Board, there have been a number of CEOs and CFOs. And the current executive leadership team under Graham is very, very different to the one that was under Tom Gorman previously, very different to the previous almost completely different.
And so to have a formulaic, position, without looking at the reality of it, the individual and the fact that, it's impossible for Tony to be too close to management because the management that he deals with is completely different from what it was only four or five years ago. So but I understand that a number of institutions, including the ASA, take a position on independence. But I also appreciate the fact that you've managed to go beyond just that mathematical calculation and see the benefits and the quality of someone like Tony Frobitt for the Bramblers Board. So I appreciate that, but thank you. Are there any other questions or observations?
Yes, Mrs. Chan? Might need to get the microphone a little lower.
Can we practice? Yes. My question is not related, not so much on Mr. Froggart's reelection. And my question is, is it possible to actually, showing when showing the results, show the percentages in along with the new Yes.
I agree with you. I agree with you 100%.
At this technology I age
think we were
I'm looking to the right here because I think we talked about that last year. So I apologize for that.
Thank you, sir.
No. Okay. Thank you. Any other questions or observations? But thank you for those which we did get.
So I'll move on. So the resolution and the direct vote without the percentages and the proxy position are now on the screen. But, please do vote, now on Item Number five and mark your voting card accordingly. You. Okay, thank you.
Item six seeks approval for amendments to the Brambles Limited Performance Share Plan as detailed in the notice of meeting and the issue of shares under that plan for all purposes, including for the purpose of Australian Securities Exchange, ASX, Listing Rule 7.2 Exception nine. Tony Froggart described the proposed changes and the reasons that they are being made, reasons why they are being made. And so that information is also in the notice of meeting. Is there a question? Are there any questions on this matter?
Mr. Barker, welcome back.
Yes, Mr. Chairman. I did indicate I would be speaking briefly on well, not so briefly on some questions, but briefly on every question other than the ones I speak. Anyhow, while the ASA is against the remuneration plan as set out, that we do acknowledge the fact that the movement to the holding period of twelve months is a movement in the right direction and consequently support the proposal.
Thank you very much, and I do appreciate that. Thank you. Any other questions? If not, I'll move on. The resolution and direct vote and proxy position are now on the screen on this one.
Please now mark your poll card for Item number six. Item number seven, if I can move to that. This asks shareholders to approve the participation by Graham Chipchase until next year, until the twenty twenty AGM, whose participation of the Performance Share Plan, if approved approval of the amendments to the Performance Share Plan under resolution is not obtained, as we've just got it, though, I think we'd say the his participation in the amended Performance Share Plan has just been approved under Resolution six for the purpose of ASX Listing Rule 10.14. Are there any questions? Yes, Mr.
Bahia.
Again, Mr. Chairman, briefly and my comments will also apply to the next agenda item. So can you take those as being That read against that because we are opposed to the remuneration plan that we also oppose to the issue of shares under that plan.
Thank you. Well, not exactly thank you, but I acknowledge your position. Are there any other questions or observations? If not, I'll move on and go to the resolution and the direct vote and proxy position, which are now shown on the screen. Please now mark your voting card for Item seven.
Item eight, our shareholders approve the same thing for Ness Rosolivans. I won't go through all the words, but it's her participation of the performance share plan as it's just been amended and approved under Item number six. Are there any questions or observations on that matter this resolution? I acknowledge, Mr. Barker, that your comments from before also apply to Mr.
O'Sullivan. Are there any other observations or questions? If not, I'll move on. The resolution of the direct vote in proxy position now on the screen, and I'd ask you to mark your voting card for Item number eight. Right.
Thank you. Item nine, our shareholders to approve participation by Graham Chipchase until the 10/10/2022 in the Brambles Limited MyShare Plan for the purposes of ASX Listing Rule 10.14. Are there any questions? Mr. Barker?
Briefly, Mr. Chairman, there was some debate in my organization about this that this was a relatively minor thing in relation to the overall package. So why should the CEO be included in this? On the other hand, the argument that did prevail was why not? So yes, we support this.
Thank you very much. Thank you. Any other questions, observations? If not, thank you. The resolution and the direct vote and proxy position are now on the screen, and I'd ask you to mark your voting card for Item number nine.
Item 10, if I can move on to that. Are we ready? Yes, thank you. Item 10 of business, our shareholders to approve Brambles reducing its share capital by a total of approximately USD 120,000,000 by way of an equal capital reduction to be affected by the company paying to shareholders AUD $0.01 2 per ordinary share held as at the record date of Tuesday, October 15. When we announced the sale of our RIFCO RPC business, we said we would return approximately GBP300 million of the proceeds of that sale to shareholders by way of a cash return.
That cash return has two components, a AUD $0.01 7 per share special dividend, which does not require shareholder approval and the AUD $0.02 capital return, the subject of this resolution, which does require shareholders' approval. The special dividend will be paid on the October 22. And if approved, the capital return will also be paid to shareholders on that date. Further details of the capital reduction are outlined in the explanatory notes to this resolution in the notice of meeting. Are there any questions on this matter?
Mr. Barker?
Again briefly, Mr. Chairman. I've already spoken expressing our support for the capital management by the Board, and this is part of it. And my comments now will apply to the next item as well that because we support the return of capital in this way that we support this proposal and the next.
Thank you very much, indeed. Much appreciated. Are there any other questions from the floor or observations? Thank you. The resolution, the direct vote and proxy position now on the screen, I'd ask you to mark your voting card for Item 10.
Thank you. I think it's we can probably move on now. Thank you. Item 11, our shareholders to authorize and approve the on market buyback of up to $240,000,000 shares in the company in a twelve month period following the approval of this resolution. When we announced the sale of our Ifco RPC business, we also said that we'd return to shareholders approximately USD 1,650,000,000.00 of the proceeds of that sale by way of an on market buyback of shares.
Brambles has been conducting an on market buyback program since the June 4, June 4 year, under the provisions of the Corporations Act, which permit our company to buy back up to 10% of the lowest issued share capital during the previous twelve months. This resolution seeks shareholder approval to extend the on market buyback to up to 15% of Bramble's issued share capital. To date, we have bought back 29,500,000.0 shares for a total consideration of $239,000,000 If shareholders approve this resolution, Brambles will be authorized to undertake further on market buybacks of up to $240,000,000 shares, approximately 15% of our issued share capital for the twelve months to the October 10. Further details on this resolution are set out in the explanatory notes in the notice of meeting. Are there any questions?
I know, Mr. Barker, that you already addressed this issue, but thank you. Are there any other questions or observations? If not, I'll move on. Thank you.
The resolution of the direct vote and proxy position now on the screen, and I'd ask you to mark your voting card for Item 11. Right. Thanks. That's the thank you very much. That's the end of the resolution.
So but do remember to place your voting cards in the boxes beside the exits. The poll will remain open for another ten minutes. And when the poll closes, you'll be notified on the screen behind me. As I said before, we will announce the results of the poll to the ASX later today. Ladies and gentlemen, thank you for your attendance today.
I remind you that copies of the sustainability review are available in the foyer, and I'd really recommend that you have a good read of that. We're very proud of it. And I'd invite you to join us outside for tea and coffee. Thank you very much, ladies and gentlemen.