Welcome, security holders, proxy holders, and guests. The Goodman Group Annual General Meetings will start shortly. Today's meetings are being held in person in Sydney and online using the Computershare meeting platform. Online attendees can watch a live webcast of the meetings, and security holders and proxies can ask questions and submit votes via the platform at any time. Online questions can be asked verbally or by typing in a question. To ask a verbal question via the platform, please follow the instructions written below the broadcast. To ask a question by typing, online attendees should select the Q&A icon at the top of the screen. Type your question in the text box. Once you are finished typing, please hit the Send button. Please note that while you can submit questions from now on, the chairman will not address them until the relevant time in the meeting.
Please also note that your questions may be moderated or, if we receive multiple questions on one topic, amalgamated together. Security holders attending in person will also have the opportunity to ask questions at the relevant time in the meeting. Voting today will be conducted by way of a poll on all items of business. The chairman will shortly open voting for all resolutions. If you are attending online and are eligible to vote, once voting opens, press the Vote icon, and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. There is no need to hit a Submit or Enter button, as the vote is automatically recorded. You will receive a vote confirmation notification on your screen. You can change your vote up until the time the chairman declares voting closed.
An online meeting guide is available in the Investor Centre on the Goodman website and includes step-by-step instructions on how to attend and participate in the meeting. The guide includes a phone number to call should you require assistance during the meeting. For security holders and proxies attending in person, if you are eligible to vote, you should have been issued with a voting card when you registered today. The items of business are on the reverse of the voting card. Further instructions will be provided following the items of business. The Chairman will now open the meeting.
All right. Good morning, and welcome to the 2023 Annual General Meeting of Goodman Group. I'm Stephen Johns, an Independent Director and Chairman of the Board. I'd like to extend a warm welcome to everyone here in the room with us in Sydney, as well as those of you who are online. Before I begin, I'd like to acknowledge the traditional owners of the land on which I am presenting from today, the Gadigal people of the Eora Nation, and I pay my respects to elders, past and present. I'd also like to introduce your directors. To my left, my immediate left, is Greg Goodman, our Group CEO. Our Company Secretary, Carl Bicego.
Morning.
Followed by Independent Directors, Phil Pryke.
Good morning.
Belinda Robson.
Morning.
And Mark Johnson.
Morning.
On my far left is Anthony Rozic, an executive director.
Good morning.
We also have a number of directors joining us from overseas. In New York, our Independent Directors, Chris Green, Hilary Spann, and Vanessa Liu. In Asia, we have our Hong Kong Independent Directors, Kitty Chung and David Collins. Independent Director, George Zoghbi, is joining us from South Africa, where he is currently traveling on business. And in Brussels, we are joined by Executive Director Danny Peeters. I now declare the meeting open. For those participating online, voting is now open. Goodman delivered another very strong result in 2023, where the group has again demonstrated its ability to adapt to changing and challenging market conditions.
Significant contributions were made from all areas of the business, which saw operating earnings per share increase by 16%, well ahead of our initial guidance to the market of 11%. Greg Goodman will talk in greater detail about the operational and financial performance of the group in his CEO address. The long-term sustainability of our business remains a priority. In addition to the strong financial performance, Goodman has made considerable progress against its sustainability targets and remains focused on delivering on, and indeed being ahead of, our 2030 ESG targets. We continue to be cautious and prudent with our capital management strategy, which allows us to retain significant resources and liquidity to manage through uncertain economic environments. The location of our global portfolio is providing value-add opportunities, both in our traditional real estate activities as well as in other uses, such as data centres.
Greg will talk in more detail about these opportunities. The value provided by Goodman is the outcome of a number of factors: the successful execution of our long-term strategy to focus on high barrier to entry markets in urban infill locations, our innovative culture, and the quality of our forward-thinking team, who understand the key structural trends underpinning our business. In October 2022, the board established a Sustainability and Innovation Committee, which has been focused on initiatives that support sustainable developments, including energy generation, low-carbon building products, and sustainable logistics solutions. The committee also assesses the impact and opportunities that emerging technologies, such as artificial intelligence, are expected to have on Goodman, our customers, and more broadly, the way people will live, work, and consume.
For Goodman, sustainability and the way we handle environmental matters are not seen merely as a compliance matter or compliance function, but as an essential element in our long-term business strategy. Having received a strike for our remuneration report at the 2022 AGM, we again engaged with a significant number of institutional investors during the year. The feedback from the vast majority of these large security holders provided the board with continued confidence in our remuneration structure, and importantly, its alignment with security holders' long-term interests. The remuneration decisions made by the board this year reflected this feedback, while also rewarding management for the exceptional results achieved in FY23. In summary, for our key management personnel, the short-term incentive component for FY23 was reduced by 10%.
The quantum of the FY 2024 performance rights for the long-term incentive plan was reduced by 10%, and challenging operating EPS hurdles were set for the long-term incentive plan, with 6%-11% compound annual growth over the 4-year testing period. It is important to note that these challenging earnings targets were set in the context of the deteriorating global economic and operational environment, and the group's exceptional results in the past 2 years, which had established a much higher earnings base from which to grow. The board firmly believes that Goodman's remuneration plan provides a fair balance between incentive and reward. Feedback again has been positive for our plan, with over 87% of the proxies received supporting the adoption of the remuneration report.
This year, we appointed three non-executive directors: Belinda Robson and George Zoghbi to the Goodman Limited Board, and Kitty Chung to the Hong Kong Logistics, the Goodman Logistics Hong Kong Board. Belinda, who is based in Australia, was appointed in March and brings over 30 years' experience in retail and commercial funds management. George Zoghbi, also based in Australia, was appointed in April. He is the CEO of The Arnott's Group and brings extensive international consumer packaged goods and supply chain experience. Kitty Chung, based in Hong Kong, was appointed in July, and has over 35 years' audit and business advisory experience. Their resumes are set out in the notice of meeting. Their knowledge and experience are well aligned to our long-term strategy and values, bringing greater geographic skills and gender diversity to the board, while helping to continually shape Goodman as a progressive company.
As you will see from the charts on the screen, we continue to focus on the diversity of our board. Over the last 18 months, we've appointed 5 new non-executive directors, 4 of whom are female and 3 are international residents. As a result, 40% of non-executive directors are female and 50% are based overseas, reflecting the international nature of our business. As previously announced, Phil Pryke will be retiring from the board in 2024. Following this, 4 out of 9 of our non-executive directors will be female, and 5 will be offshore residents. During the formal business section of today's meeting, each director standing for election or re-election will address the meeting. As announced at last year's AGM, after 11 years, Rebecca McGrath retired from the Goodman, Goodman Limited Board in February this year. We again thank Rebecca for her considerable contribution to Goodman.
I'd also like to acknowledge our long-serving director, Phil Pryke, who, as I just mentioned, will be retiring from the board in the first half of 2024. Phil, who chaired the Remuneration Committee from 2010 until earlier this year, has been instrumental in the formulation of the group's remuneration strategies and a keen contributor to board deliberations more generally. He has helped steward a successful international business with strong shared culture and long-term focus that is testament to the policies promoted by the Remuneration Committee. On behalf of the board, I would like to thank Phil for his dedication and commitment to the group over the last 13 years. Thank you, Phil. In closing, Goodman has built a sustainable business with solid long-term strategy to deliver on future growth opportunities. This is underpinned by our high-quality global
Global industrial real estate, a committed and experienced management team, a proven business model, supportive capital partners, and a strong balance sheet. On behalf of the board, I sincerely thank our people for their commitment and determination in achieving excellent results in FY23. I also extend my gratitude to you, our security holders, for your ongoing support of Goodman. Before I hand over to our Group CEO, Greg Goodman, we'll show you a short video to highlight some of the strategic drivers Goodman's global business as providers of essential infrastructure for the digital economy. Thank you very much.
The digital economy is transforming our lives. It's increasing efficiency and sharpening our customers' need for supply chain optimization, for improved productivity, increased data storage, and greater computer processing power.... The digital economy is raising expectations. Consumers want everything faster and greener. By 2027, e-commerce will make up 24% of all retail sales globally. To compete, customers need faster speed to market and greater supply chain resilience. The digital economy is creating demand for our properties. Goodman is regenerating existing sites in high quality locations that are strategically close to consumers. More than half of our development work in progress is on brownfield sites, and we're working with local planning authorities and Goodman Foundation partners to build sustainable and resilient communities. The digital economy is fueling growth.
The uptake of AI and cloud computing is increasing data centre demand, which is estimated to more than double by 2030 data centres account for around 25% of Goodman's development workbook, and our pipeline is close to 4 GW. The digital economy is driving our business forward. Goodman is agile, innovative, and built for the long term. We're resilient, and we have the capital and people in place to deliver on our strategy. Goodman: essential infrastructure for the digital economy.
Good morning, and welcome. Hopefully, that video was informative for you here this morning. Certainly got a very, very broadly based business around the world. Goodman Group has had a strong year. We delivered operating profit of approximately AUD 1.8 billion, translating to operating earnings per security increase of 16%. Operating profit has almost doubled over the last five years. The average operating earnings per share growth is 17% per annum. Despite the macro uncertainties we're seeing around the world, the structural forces in our markets remain intact. Our concentration on supply-constrained markets means there's strong demand for our property around the world. Customers are looking to improve their supply chains with more strategic locations, mechanization, automation, and AI. On top of that, we're seeing unprecedented demand from data centre users as the growth in cloud computing and AI expands.
The group and partnerships have strong balance sheets and liquidity. In FY 2023, we raised AUD 1 billion of new equity commitments and partnerships and completed AUD 6.4 billion of debt refinancing. Importantly, the group has low gearing, no debt maturities until late 2025, and significant hedging in place. And as a result, we're well positioned to adapt to the changing environment and pursue investment opportunities. Our portfolio continues to be in demand with strong fundamentals as our properties are in the best markets around the world. We still have almost zero vacancy globally, and our like-for-like net property income growth has increased to approximately 5%. Goodman's development earnings for FY 2023 increased to AUD 1.3 billion, which is up 35% on the previous year.
Our development workbook stands at AUD 12.7 billion, and notably in the last quarter, we had AUD 1 billion of completions, which were 98% leased, underscoring the strong demand. We're very measured and very careful around development. We're starting, and it's only the most constrained markets around the world is where we're developing. Assets under management have grown to AUD 83 billion, driven primarily by development completions, acquisitions, and revaluations. We delivered an average total return of 7.3% for our investment partners and expanded their investment management platforms. Guided by our 2030 sustainable strategy, we continue to integrate, integrate ESG into the business.
Our focus throughout the year remained on incorporating sustainable design features into developments, reducing carbon emissions in line with our targets, and highlights include reaching around 75% of our 2025 solar PV target and contributing over AUD 10 million to community causes via the Goodman Foundation. As you saw in the video played earlier, the digital economy is providing opportunities across our business, data centres a significant opportunity for Goodman moving forward, data centres are measured in power rather than square meters, and Goodman has delivered 0.6 GW of powered sites. One of the many advantages we see in the space is our significant land bank globally, where we've got options for industrial development or in specific cases, where we can get the power and planning data centres. We currently have a global power bank of 3.7 GW.
Of this, approximately 2 gigawatts have been secured, with the remainder in advanced stages. Data centres are currently 25% of our work in progress, and you'll see from the map that there's opportunities in our major markets around the world. We expect to develop this existing power bank out over the next 7-10 years. Coming into 2024, we expect continued disruption and volatility in real estate markets globally. However, Goodman is well positioned to not only withstand these challenges, but also capitalize on opportunities. Our customer focus on maximizing productivity and efficiency in this environment continues to support our portfolio. The opportunities in data centres are going to be increasingly a bigger contributor to our growth, as escalating technology and computer processing power requirements generate unprecedented demand. A conservative approach means we have low gearing, we have strong liquidity, and no immediate debt maturities.
This puts the group in a strong position to take advantage of the emerging opportunities we're seeing around the world. We believe Goodman can continue to deliver despite the risks associated with the current market volatility. We expect FY 2024 operating EPS growth to be 9%, which equates to over AUD 1.9 billion of operating profit, with a full year distribution of AUD 0.30 per share. Finally, I would like to thank the board, the Goodman team around the world, our security holders, as well as our customers and all stakeholders for your continued support. Thank you, and I hand back to Stephen.
A reminder that security holder questions will be addressed during the formal business section of today's meetings. Online attendees can ask a written question at any time by selecting the Q&A icon. Type your question into the text box. Once you have finished typing, please hit the Send button. Please ask your questions concisely. If they are particularly lengthy, they may be summarized in the interests of time. Questions may be moderated to avoid repetition. If you are attending online and would like to ask a question verbally, please follow the instructions written below the broadcast. Security holders attending in person are also invited to ask questions. If you would like to do so, please approach the microphone stands on the meeting room floor after the chairman asks for questions in respect of the relevant resolution.
For those attending online who have not yet voted, you can vote by pressing the Vote icon, and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. There's no need to hit a Submit or Enter button, as the vote is automatically recorded. You will receive a vote confirmation notification on your screen. You have the ability to change your vote up until the time voting is closed. For security holders attending in person, you will be asked to cast your vote by placing your voting card in one of the ballot boxes available at the end of the meeting after all the resolutions have been considered.
All right, thank you. And, and Greg, thank you for that, CEO address. We'll now commence the formal proceedings of the meeting. I intend to answer the questions from those attending in person first, then answer questions received online. This is also an opportunity to ask general questions about the group's business. You'll have an opportunity to ask specific questions in relation to each resolution when those resolutions are formally put to the meeting later on. I'm assisted by one of our senior executives, Alison Brink, in moderating and asking the questions that are submitted online. The first item of business is the consideration of the annual report and the accounts of Goodman Limited, Goodman Industrial Trust, and Goodman Logistics (HK) Limited. I table a copy of the annual report before the meeting.
Eileen Hoggett, who's sitting in the front row from our auditors, KPMG, is also available to answer any questions that are relevant to the audit. We'll now respond to any questions in relation to the annual report and also to the group's general business. Are there any questions? Or observations?
Kevin Daly. Kevin Daly.
Mr. Chairman, Kevin Daly, security holder.
Good morning, Mr. Chairman. Just a quick question on the development of data centres that you're going about. I noticed you had 1.2 GW of power slated for Europe, and Europe's not too flushed with power just at the moment, so I'm wondering what the timescale is for the development of those data centres.
Well, not just Europe, but generally speaking, the data centre developments will extend over a lengthy period of time, probably more towards the latter period of five, six, seven years. So when we're planning ahead and we're looking at the future prospects of the group, data centres will be a large part of the work in progress, but not the only part by any means. Our traditional real estate, industrial real estate, will certainly be with a major part of our activities as well. But I think, from what you saw and heard from Greg Goodman just now, data centres provides a great opportunity for us. Getting the power is the real key on those sites, and the fact that Europe might have some difficulties or restrictions on power actually makes the power that we do have even more valuable.
... Mr. Chairman, Brian Allison, security holder.
data centres are the subject for today, I think. I'm just wondering about some more detail. When you make a new industrial development, are you going to incorporate a data centre into each one? Which would, I imagine, mean that that would make it more desirable and maybe higher rents and things like that. Is that how you see it?
Well, well, firstly, can I say this, and I don't mean to be facetious or silly, but I'm really delighted that data centres are the feature today, not remuneration. But, and that's actually the way it should be, because, Goodman has been extremely successful over many, many years with our industrial real estate activities, and data centres is part of that. It's, it's not a, a diversion, it's not a, a change into a different business. And I will get Greg to respond a bit more because he knows much more about the detail. But I think, what is really important here is that, we're really well established. We need a strong balance sheet to be able to do data centres. They take a long time to, to develop from the first, acquisition of the site to actually doing the development.
So we're really well positioned for that. But I think, Greg, you might like to add a bit more detail.
Yeah, good, good question. I, I think the first point is that the data centre is being built out on sites we already own around the world, and we've owned them, many of them, for 20, 30 years. And we've actually been building data centres and providing data processing power for customers for about 12 years now. What, what's changed is that the demand through AI and the other activities that are going on with data generally and privacy, has given it a, a kick forward very, very rapidly, and we're dealing with a lot of hyperscalers around the world in regard to data centres.
But your question is a good one, because in a very big multibillion-dollar development we have in Tokyo and Chiba, there is a number of hyperscalers on that site, including then industrial buildings as well. So it's actually fully integrated, and we picked up the power with the additional site power for data centres on that site, I think about six years ago, when we realized that it was viable and we had some inquiry from some hyperscalers. But we are actually developing industrial buildings alongside data centres, fully integrated park in that one example in Tokyo, and that will occur in other areas and other sites around the world as well. So good question.
Yeah, I'm just thinking how disruptive this could be and whether I should take a profit on my Macquarie Technology shares, so thank you for that.
Oh, yeah.
Are there any more questions? Alison, any online?
There are no further questions, Mr. Chairman.
A question up here at the front. Thank you.
Can I get your name, please?
Howard Pascoe.
Mr. Chairman, Howard Pascoe, security holder.
Mr. Chairman, I come from Stephen Mayne country, which is Manningham in Victoria. And I'd like to report that Stephen no doubt got a few questions to ask online. But I went to the annual meeting of the council, and his daughter has now become deputy chair, deputy mayor of the council. So that's equivalent to Greg Goodman, all of a sudden, has nominated his daughter as being on the board. That's equivalent to have Stephen and Laura, his daughter, being on the council. And it's interesting. Fellow councilor with Manningham Council, City of Manningham, Councilor Anna Chen, she made an interesting observation. She originally, the family come from Taiwan, that at annual general meetings of companies in Taiwan, the security holders get a little gift when they've been to the AGM.
Now, I know that we have sandwiches and a cup of tea and coffee and so forth, so it's an idea, Greg, and your board, and Mr. Chairman, a little gift, a tie pin or something that promotes Goodman Group for us to wear. It's a suggestion to the board. There's something that companies in Australia don't do. There's an idea that I've given you. And finally, some compliments about the signage. If anyone goes down to Moorabbin Airport in Melbourne, Goodman Group, for those who don't know, controls Moorabbin Airport, and they've constructed a business complex, and the signage around the airport is excellent. And why I say that is I was a municipal councilor for six years, and signage is very important for anyone involved in local government.
But the standard of the signage around the airport, and I look at the sign there, that green, everyone loves green, don't they? It's a sign of rain and production in agriculture. The color, for a start, is a winner, and I suggest that the standard of your signage is excellent. Congratulations to the board, and keep up the good work.
Well, thank you very much, and appreciate the observation. I think the board doesn't take any responsibility or credit for the signage. I'll leave that with management. But as regards a gift, that might be a step too far, but we'll give it some consideration. Maybe just further increases in the share price might be. Alison, do we have any other questions?
There are no further questions.
Any more questions from the floor? Yes, we do have.
... Mr. Chairman, Warren Davis, security holder.
Welcome, Warren.
Hi. Look, just two questions. The first one I know is you said one of your members is over, going over to Africa. Are you looking to expand in Africa, and if so, whereabouts, out of curiosity? The second question is slightly different. With all the media about hacking and things like that, I imagine you guys retain a lot of information about very high- profile companies. Do you have a very good team or developing an extremely good team to protect against this sort of stuff that's going on? Thank you.
Well, thank you for those two questions. Firstly, no, we have no plans to go to Africa. George Zoghbi is in Africa on business, so he's on the board of Brambles, which he's retiring from at the end of this year, and this is his final board meeting, and it's being held in South Africa at the moment. So that's the reason why he's there. And he's but he's online today, listening in to this meeting. Secondly, just remind me of the second question. I got so carried away about Africa. Oh, cyber. Sorry. We first of all, we're a business which is a B2B business, business to business, not business to consumers. We don't have a lot of sensitive information about people's credit card details and the like.
I'm not saying it's not an important issue for us. It is. It's one we, we handle very carefully and very diligently. We, our IT team look at that. Our Audit, Risk and Compliance Committee receive regular reports about the activities and the, and the protections and the like that we have there. But overall, you know, first of all, we haven't had any issues with to date, touch wood, and that's important to note. But secondly, it's not a matter which, we're not an Optus, we're not a company which has got a large amount of consumer information. So from that point of view, we're not a great target either, which is fortunate.
But we do take it seriously, and it's very important going forward, and we spend a fair bit of time and resources to make sure that we've got protections in place. Are there any other questions?
No further questions.
Thank you very much. Well, on that note, I'll move on, and I, and I'll turn to the formal resolutions set out in the notice of meetings. My fellow directors and I support the resolutions 1-10. Please note that where open proxies are held by me as chairman, I intend to vote these proxies in favor of each of the resolutions of 1-10. For transparency and the benefit of the meeting, I'll now present the results of the proxy votes on these resolutions, on resolutions 1-10. All of the resolutions proposed as ordinary resolutions and will be approved if passed by more than 50% of the votes cast.
As can be seen, with the proxy votes received, which account for about 83% of our register, I expect that all the resolutions will be passed on the casting of those proxy votes. As mentioned at the commencement of the meeting, for security holders participating online, polling has opened and will close at the end of the meeting. For those of you who are with us here in the room, we will vote on resolutions 1 to 10 after they have been put to the meeting, so at the end of the meeting. As explained in the notice of meetings, as a result of the technical structure of the holding of Hong Kong securities on the ASX, security holders cannot vote personally at this meeting in respect of Goodman Logistics (HK) Limited resolutions.
Rather, CHESS Depositary Nominees Pty Limited will vote these interests in accordance with the voting and form directions that they received prior to the close of proxies, which was 10:00 A.M. on the 12th of November. This applies to resolutions 1, 2B, and 6. 2B is particularly important because it relates to my re-election, but that's another matter. In accordance with the Corporations Act and determinations made under the Constitution, each of today's resolutions will be decided via poll. The first resolution for members to consider as an ordinary resolution of Goodman Logistics (HK) Limited is to appoint KPMG as auditors of the company to hold office until the next AGM and the directors be authorized to fix the auditors' remuneration. I now move that resolution 1 be approved. Are there any questions from the floor or online?
There are no questions, Mr. Chairman.
Thank you very much. I think we can move on to the next resolution. The next item on today's agenda is my re-election as a director. I'll shortly ask Mark Johnson, the Chair of the Audit, Risk and Compliance Committee, to chair this segment of the AGM. But before doing so, I'd like to address the meeting in relation to my re-election. I've had the privilege of being a director of Goodman Group since January 2017, and the Chairman of the Board since November 2020. Today, I seek your support for a further three-year term. By way of background, I have been Chairman of three large ASX-listed companies. This has given me significant exposure to a range of industries, including property, construction, logistics, and infrastructure, in addition to valuable experience in relation to the management of listed public companies.
I was on the board of Brambles Limited for 16 years, the last 6 as chairman until my retirement in June 2020. Brambles, as you may know, is a supply chain logistics company with operations in more than 60 countries. My time there provided me with considerable global experience in the logistics sector, which is valuable for my role as a director of Goodman. Previously, I had been chairman of Leighton Holdings, at the time, Australia's largest construction company, and Spark Infrastructure, a significant electricity distribution business operating in Victoria and South Australia....My experience in the property sector is both at an operational and board level. I was a senior executive of the Westfield Group for more than 30 years, during which time I held a number of positions, including that of finance director from 1985 to 2002.
Following my retirement as an executive in 2003, I remained a non-executive director until 2013. I'm also currently a director of the Garvan Institute of Medical Research and the European Australian Business Council. During my time on the Goodman board, the group has continued to leverage and benefit from the significant growth opportunities that the digital economy has offered. This has been the result of a well-planned and executed strategy that anticipated customers' needs ahead of time, coupled with prudent capital management and resource allocation. It is the long-term vision and consistent focus on our global strategy that is testament to Greg Goodman and his team. I'm fully supportive of the group's strategy, which is focused on delivering sustainable growth and creating long-term value for all of our stakeholders.
I believe I have the relevant international industry and commercial experience that continue to be an effective director and chairman of the Goodman Group. If reelected, I'll continue to serve you diligently by working constructively with management and adding value to board deliberations, while always maintaining a strong focus on corporate governance and risk management. I now invite Mark Johnson to the rostrum.
Good morning, ladies and gentlemen. Resolutions 2 A and 2 B are for members to consider as ordinary resolutions. A, the re-election of Stephen Johns as a director of Goodman Limited, and B, the re-election of Stephen Johns as a director of Goodman Logistics (HK) Limited. I now move that resolutions 2 A and 2 B be approved, and ask if there are any questions that might be submitted in respect to those resolutions. Firstly, on the floor. And then, Alison, are there any questions on the line?
Yes, I have a question from Stephen Mayne. The previous long-term chair was critical of the way Commonwealth Bank dealt with our company during the GFC, when we were forced to do highly diluted equity raisings. Could the new long-term chair, Stephen Johns, and CEO, Greg Goodman, clarify whether we have ongoing dealings with the Commonwealth Bank?
Thank you. Greg, did you want to take that question?
Yes. Yes, we do, as we do with all the major Australian banks. But I think the difference here is our leverage is very, very low, about 8%, across the group and across partnerships, around 17%. So it's fair to say we're in control.
Thank you for that question, Stephen. Are there any other questions on the line?
No further questions, Mark.
Any further questions from the floor? Or questions from the floor? No. I hand the microphone back to you, Chairman.
Thank you.
Congratulations.
Well, thank you, Mark, and thank you, Stephen Mayne, for that question as well, because you actually, I think, if I heard correctly, said that I'm a long, long-term chair of Goodman Group. I've been here as the chair for three years, and I hope for another three, so thank you for that implicit support. But moving on. The third resolution for members to consider as an ordinary resolution of Goodman Limited is that Mark Johnson, a director retiring by rotation, in accordance with the Constitution and the listing rules, be elected or reelected as a director. I now invite Mark to address the meeting.
Thank you for this opportunity to speak to you this morning. It's my pleasure to say a few words in support of my reelection to the board of Goodman, and it would be a great privilege to continue to serve you. As others have noted earlier, the last few years have been successful as the company and its partners have executed with distinction the plans and strategies for growth. As evidence of this, in the three years since I was elected, assets under management have grown by more than 60%. The development pipeline has lifted beyond AUD 10 billion, and opportunities have emerged to respond to a new digital world in areas such as data centres, which we've of course discussed already today.
Through this period, in addition to being an active board member, I have chaired the Audit Committee and more recently, the merged Audit, Risk and Compliance Committee, and for the last 12 months or so, I've also been a member of the Remuneration and Nomination Committee. I really have enjoyed this period of service immensely, and I am excited by the potential and opportunity that lies before us with strong execution from the global team and, of course, good risk management. As you will have observed from the brief bio included with the notice of meeting, I spent my last 10 years or so serving on the boards of listed mutual and private companies in a range of industries. My previous board experience includes Westfield, Coca-Cola Amatil, and HSBC Bank Australia, among many others.
Today, I serve on several other boards which offer very relevant experience, including Boral, Metcash, and Sydney Airport. My director career followed some 30 years in professional services, which culminated in a period as the Australian CEO of PwC and its Deputy Chairman for Asia. Through this part of my career, in addition to leading a AUD 2 billion business with some 6,000 staff, I served large clients in accounting, audit, risk, and control, mergers and acquisitions, due diligence, legal support, and other related services. Many of my clients operated in the property industry or industries served by them....
Ladies and gentlemen, through my various roles, I've been actively involved in several of Australia's major corporate transactions in business and technology transformations, business simplification and standardization, major capital expenditure and property purchase, purchases and related value creation, in emerging supply chain, digital and data strategies, and focused collaborative approaches to working with customers to build mutual success. I am confident that all this experience positions me well to continue to contribute to important board deliberations and decisions, and to support strong performance at Goodman for the benefit of all stakeholders. I would be very grateful of your support this morning. Thank you for this opportunity to speak briefly to my candidacy, and I'll hand back to you, Chairman.
Thank you very much, Mark, and I now move that Resolution Three be approved. Are there any questions? Firstly, from the meeting here on the floor? No, I don't think there are at the moment. Alison, are there any questions online?
Mr. Chairman, I have a question from Stephen Mayne. "Goodman Group has around 55,000 retail shareholders, but less than 2,000 of them would have voted today because we all feel overwhelmed by the big institutional shareholders. To stimulate further voting participation, when disclosing the outcome of voting on all resolutions today, including this re-election of Mark Johnson, could you please advise the ASX how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and is a disclosure initiative adopted by the likes of Metcash, Dexus, ASX, and Myer. Even Qantas did it earlier this month. Will Goodman follow suit?
I'm not quite sure about the detail of that question, but, let's say that, we'll take that on board, and we're providing full details of the voting to the ASX this afternoon, and that, we'll have a look at that, and I assume that we can actually include that information. Any other questions, Alison?
There are no more questions.
Right. Thank you. If we can move on to Resolution Four. The fourth resolution for members to consider as an ordinary resolution of Goodman Limited, is that Belinda Robson, a director appointed since the last AGM and retiring in accordance with the constitution and the listing rules, be elected as a director. I now invite Belinda to say a few words in support of her re-election or her election.
Thank you, Chairman. Good morning, everyone. My name is Belinda Robson, and I'm honored for this opportunity to be considered for the position as an Independent Director on the board of Goodman Group. I was appointed in March of this year following interviews with Greg, the chairman, and all members of the board. As you all well know, Goodman Group is a global leader in industrial real estate, with a clear and disciplined strategy on key markets and delivering value to its shareholders and its high quality and global capital partners. I believe I can add value to the group through my nearly 35-year career in the real estate and funds management sector, and in the last 10 years, my experience gained in non-executive director roles in both the Australian-listed and global unlisted real estate sectors.
My real estate experience has been predominantly with retail assets and more recently, premium office buildings. My executive career of nearly 23 years at Lendlease spanned across all aspects of property, including management, development, asset management, as well as funds and capital management. This fund management experience, in particular, has given me a deep understanding and relationship with the capital, both in the listed and unlisted environment. In addition to my potential role at Goodman, I'm also involved in other real estate ventures that are heavily weighted to retail and office, both here in Australia and offshore. These include, firstly, being an Independent Director of the Region Group, where I also chair their Investment Committee, and I am a member of the Remuneration Committee. Secondly, an Independent Director of GPT Funds Management, which brings me hands-on, non-executive experience in understanding the important relationship between capital and its service provider.
And thirdly, as a director of a specific special purpose vehicle for Lendlease's Asian Retail Investment Fund. My exposure across other types of property asset classes, both in Australia and overseas, gives me a different perspective and insight that I feel I can bring to Goodman Group. In addition, I believe my knowledge of partnering and managing third-party capital, along with my ASX-listed experience with Region Group, gives me a range of skills that can contribute to the Goodman platform. At Goodman, I've been a member of the Audit and Risk and Compliance Committee since joining in March. If successful today, I look forward to working with the outstanding Goodman team, and I am very excited to be invited to be part of such an incredible leading-edge organization.
Goodman Group has been integral in transforming what we property people used to call sheds into some of the most technologically advanced buildings that facilitate an ever-changing and global world. Thank you.
Thank you, Belinda. I now move that Resolution Four be approved. Are there any questions in relation to this resolution?
Yes, sir.
Firstly, from the floor? No. Alison?
Mr. Chairman, I have a question from Stephen Mayne.
Right. Thank you.
Could new directors, Belinda Robson and George Zoghbi, along with the chair, comment on the recruitment process that led to their appointment to the board? Was a headhunter involved? Did the full board interview any other candidates? And did the new directors know of any other directors before engaging with the recruitment process?
Right. That's a very broad question, do we know of any other directors? But, Stephen, we go through a process at times where we use recruitment firms, and other times we, we don't, where we know people individually, and we handpick them or seek them out because of their particular expertise and involvement in, in our business or businesses related to what Goodman does. In this particular case, we did not use recruitment firms, and we didn't find that necessary. And in fact, we're really delighted that we could get such high caliber candidates through our own personal contacts and relationships.... Are there any other questions?
There are no further questions.
From the floor? Thank you. If we move on, then, to the next resolution. The fifth resolution for members to consider as an ordinary resolution, once again, of Goodman Limited, is that George Zoghbi, a director appointed since the last AGM and retiring in accordance with the Constitution and the listing rules, be elected as a director. As I mentioned earlier, George is traveling in South Africa, so we've pre-recorded a video of George saying a few words and addressing the meeting in support of his election.
Thank you, Stephen, and good morning, everyone. My name is George Zoghbi, and I present myself for election on the board of Goodman Group, having been appointed in April 2023. I have more than 30 years' experience in retail and consumer goods sectors across the global markets, including investments in supply chains, portfolio management of businesses, strategy, and leading global teams. I am currently the CEO of The Arnott's Group, an Australian-based company with strong local and international businesses. Previously, I was the Chief Operating Officer at Kraft and the Kraft Heinz Group, based in the United States. Prior to Kraft, I held a number of leadership positions with local and global responsibility at Fonterra, the global dairy company.
I also hold a number of board positions with publicly listed global organizations, including the Kraft Heinz between 2018 and 2021, based in the United States and listed on in New York. Brambles Limited, listed in Australia since 2016, and from which I will retire at the end of this year. I've also been on the advisory board of Altimetrik, a data analytics and digital transformation company based in Michigan, the United States. I'm excited to join the board of Goodman and look forward to working with Greg and his management team on this exciting journey to execute the group's strategy to power future growth. I believe my global experience, both as an executive and board members in related businesses, can add new perspective to an already successful organization.
I commit to you to discharge my responsibilities as a director with dedication and diligence to serve your interest as security holders and support the continued success of Goodman Group. Thank you.
Thank you, George. I now move that resolution 5 be approved, and I'll address any questions which you may have, on the floor or online. Any questions here on the floor? Alison, online?
There are no questions, Mr. Chairman.
Thank you. We'll move on. The sixth resolution for members to consider as an ordinary resolution of Goodman Logistics (HK) Limited, is that Kitty Chung, a director appointed since the last AGM and retiring in accordance with the Constitution and the listing rules, be elected as a director. I now invite Kitty from Hong Kong to say a few words in support of her election.
Thank you, Mr. Chairman, and good morning, ladies and gentlemen. This is Kitty Chung. It is a pleasure to present myself today for election to the Goodman Logistics (HK) Limited Board, having been appointed in July 2023. Until my retirement in July this year, I had 37 years' experience in audit and assurance with PwC, where my focus was on IPO and listed entities in Hong Kong and the United States, covering the retail, manufacturing, energy, and technology sectors. During this time, I gained extensive experience in capital market transactions, mergers and acquisitions, and provided professional advice on corporate governance, internal control, and risk management. I currently serve as an Independent Director for Goodman and HKBN Limited.
HKBN is a Hong Kong-listed company, a leading integrated telecom and technology solutions provider, including broadband, data connectivity, cloud and data centre, system integration, cybersecurity, mobile services, roaming, and digital solutions. For over 10 years, I have also been a member of the Allocation Committee of the Hong Kong Community Chest, a major charity organization in Hong Kong. I was born in Hong Kong and hold a bachelor degree in economics from Monash University and an MBA from the University of Wales and University of Manchester. I'm a qualified accountant and a member of Chartered Accountants Australia and New Zealand, and Hong Kong Institute of Certified Public Accountants. I believe my extensive experience in the Asia Pacific region, along with my financial, audit, and compliance expertise, position me to make a valuable contribution to the board of Goodman Logistics (HK) Limited.
I'm honored to be considered for this position and look forward to working with the board and the management team to support Goodman's future growth. If elected to the board, I will give you my commitment and dedication to serve in your interest as security holders to support the continued success of the group. Thank you.
Kitty, thank you very much. I now move that Resolution six be approved. Are there any questions either on the floor or online? From the floor? I don't think there are any. Alison, online?
There are no questions, Mr. Chairman.
Thank you very much. So, Resolution 7. The seventh resolution for members to consider as an ordinary resolution of Goodman Limited is to adopt the remuneration report for 2023. I'm pleased to report that based on the proxies received, I expect more than 75% of the votes will be in support of this resolution. A voting exclusion applies to this resolution as set out in the notice of meetings. The directors and other key management personnel will not be voting any of their securities. I now move that Resolution 7, that the remuneration report for the year ended 30th of June 2023, be adopted. I'll now address any questions in relation to the remuneration report. Firstly, from the floor. Any questions? If not, we'll move to Alison. Any questions online?
Yes, Mr. Chairman, I've got some questions from Mr. Stephen Mayne. Firstly, well done on avoiding a second strike, but there was still a double-digit protest vote. Under the previous incentive scheme for staff, on average, they could be issued almost 1% of the company each. With a market capitalization of AUD 43 billion, these are becoming increasingly big numbers. During the good times, total compensation for our staff can comprise of as much as 60% of total pay. Therefore, why did our reporting of operating EPS continue to exclude the cost of share-based payments to staff for many years?
Right. Thank you, Stephen. That's an important question, and I think it's one which is raised by one of the proxy firms regularly, which is Ownership Matters. Firstly, you mentioned the 60% level. A feature of Goodman's remuneration plan and the structure of our remuneration is that a very, very large portion of pay of executives is at risk, and to have a 60% level at risk is very large by any level, any comparison in the Australian market. And so therefore, if we have good performance, our people will do well. If the performance of the group is not good, our people will not be remunerated anywhere near as well and will be probably well below what elsewhere is available in the market. I think it's also relevant to understand when we look...
People look at Greg Goodman's pay. Greg's remuneration is over 90% at risk, and so therefore, what we do is reward very good at performance and outperformance. In terms of the specific question about profit and how we calculate profit. We work on operating profit, that is a cash-generated profit. It reflects, apart from some timing differences, the actual cash generated by the business, which we traditionally and will continue to say is the way the business should be run. It's a very healthy way of looking at it. It determines the way we manage our finances. It also is the basis on which our people right around the world are judged, valued and remunerated. And so from our perspective, all non-ca...
All major non-cash items, whether they be the share-based payment expense, which is what I think you're referring to, or indeed, a revaluation of assets or even—and I think the other element is the mark to market of derivatives. Those non-cash items are not included in the way we formulate operating profit, which we think is the right way to go, which is a very healthy way to go. I think you'll recall from all security holders will recall going back many years where companies have paid dividends out of non-cash earnings, out of revaluations. It was a recipe for disaster, and it happened in many cases going back some 15, 20 years, particularly with some of the early infrastructure companies.
Goodman has a very healthy attitude, in my view, a very, you know, and stood the test of time, and you can see it in the results. That operating profit, which is a cash-generated profit, is the healthy way to go, and that's the way we will continue to look at it. I think the other element, which is really important, Stephen, I'm sure you're aware of this, is that the market, generally speaking, as far as I'm aware, and I think as far as our management team are aware, the market values Goodman securities based on the cash flow, the operating cash flow profit. And so that's the multiple that you see in the market, which determines our AUD 22 share price, security price.
So in addition to all the other good reasons why, from an internal point of view, we should be focusing just on the cash profit, if the market is valuing it, valuing us on that basis, I think that's the way we should focus. Well, that's what we should focus on when we look at remuneration. Are there any other questions?
Mr. Chairman, I have another question from Stephen Mayne. Did any of the five main proxy advisors, ACSI, Ownership Matters, Glass Lewis, ISS, and ASA, recommend a vote against any of today's resolutions, including the remuneration report item? Has there been a material protest, proxy protest vote against any of today's resolutions?
... I wouldn't say there's been a material proxy vote to Ownership Matters, and actually, recommended against the remuneration report, principally on the matter that we just discussed. Namely, that they believe that the share-based payment, the non-cash share-based payment, should be included in the operating profit number, and that's in-- that, from their perspective, is relevant and important for determining remuneration. It'd be interesting to actually, interesting to point out, that if we had have included the share-based payment in the operating profit, in, in an operating profit line, the growth in operating profit after the share-based payment would have still have been extremely high, and the remuneration targets for the long-term incentive plan would have been met over the recent years, over the last 4, 4 or 5 years for the participants.
So in essence, while we stick to our principles and say that cash is king, that we should be looking at cash, and only cash, when we're determining operating profit. At the end of the day, it would not have made any difference to the way we actually awarded performance rights and the rights which actually vested. Having said that, yes, we did unfortunately not receive the support of Ownership Matters and actually based, I believe, just on that one particular point. Are there any other questions?
Mr. Chairman, I have a comment from the Australian Shareholders Association. "The ASA congratulates Goodman Group on achieving the results that it has in a challenging year for most property companies, and we are supporting the remuneration report after many years of voting against it, due to the change of using face value to measure the worth of awards.
Thank you very much. And the representative of the ASA would have been here today, I understand, but is not well, so. But thank you very much, and I appreciate that support and that observation. Are there any other questions? If not, Alison-
There are no questions.
Thank you very much. So we'll now move on to the consideration of resolutions 8, 9, and 10, which each relate to the grant of performance rights to the three executive directors. A voting exclusion applies to these resolutions. In summary, the executive directors cannot vote their securities on any of these resolutions. Before proceeding to the following resolutions, I note that I propose to conduct the discussion on resolutions 8, 9, and 10 together, once these three resolutions have been formally put to the meeting. So starting with resolution 8.
This resolution is for the members to consider as an ordinary resolution of each of Goodman Limited, Goodman Industrial Trust, and Goodman Logistics (HK) Limited, to approve, for all purposes, the grant of 900,000 performance rights to and the acquisition of securities, Goodman securities by Greg Goodman, as described in the explanatory memorandum. I now move that resolution 8 be approved. The ninth resolution is a similar one for the members to consider as an ordinary resolution of each of Goodman Limited, Goodman Industrial Trust, and Goodman Logistics (HK) Limited, to approve, for all purposes, the grant of 455,000 performance rights to, and the acquisition of Goodman securities by Danny Peeters, as described in the explanatory memorandum. I move that resolution 9 be approved. Finally, if I move to resolution 10.
For members to consider as an ordinary resolution for each of Goodman Limited, Goodman Industrial Trust, and Goodman Logistics (HK) Limited, to approve, for all purposes, the grant of 500,000 performance rights to, and the acquisition of Goodman Group securities by Anthony Rozic, as described in the explanatory memorandum. I now move that resolution 10 be approved. Now, I'll address any questions in relation to all of these three resolutions, resolutions 8, 9, and 10, involving the grant of performance rights to Greg Goodman, Danny Peeters, and Anthony Rozic. Are there any questions or observations from the floor? If not, Alison, over to you. Are there any questions online?
There are no questions, Mr. Chairman.
Well, thank you. Well, I'll now move on. I think, the voiceover earlier on described a lot of the voting procedures, but I'm told that I have to repeat them here, so I will do so. Having put all the resolutions to the meeting, it's the opportunity for those attending in person to vote on them. For those of you in the room with us today, please vote using the voting card you were given when you registered this morning. This is the voting card. If you're participating online, and you've not already done so, you can vote by pressing the Voting icon on your screen. The vote on all resolutions will be conducted by way of a poll. Six is busy, Mr. Chairman. I'm sorry? Item six in the card. Yes. Busy. It's busy?
It's because you...
It's in the next page.
Yes, Mr. Chairman, it's
Yep.
It's one of those resolutions that can't be voted on from the floor today.
That's the... Yep. So, Computershare is assisting us today in the collection and counting of voting cards. We'll just pause for a moment while we collect the cards here in the room. Yes, Resolution 6 was the resolution appointing Kitty Chung, and that was for the Hong Kong company, and that can only be done through the proxy firm. I think we've collected... Now we're almost through collecting cards. Are we all done? Thank you. So thank you for voting, and I'll now confirm that, and I think Computershare can confirm that the voting is complete. Yeah. Thank you. I now declare the voting closed. Thank you for your patience. I'm pleased to confirm that resolutions 1 to 10 were passed, and that votes in favor of the remuneration report substantially exceeded the 75% threshold.
As I mentioned before, we'll be announcing full details of the voting results to the ASX this afternoon. As there's no further business to be considered, I now formally declare the meeting's closed. For those of you here with us today, we invite you to join us outside for refreshments. For those of you online, thank you for participating in today's meeting. To all security holders, thank you sincerely for your ongoing support. That's the close of the meeting. Thank you very much.