Good afternoon, everyone, and welcome to Pepper Money Limited's Annual General Meeting. My name is John Williams, and I am the company's General Counsel and Company Secretary. I would like to begin by acknowledging the traditional custodians of the land on which we meet today, the Gadigal people of the Eora Nation. We pay our respects to each of their elders, past, present, and emerging. Following an address by our Chair, Mike Culhane, and our CEO, Mario Rehayem, we will move to the formal business of the meeting. Following that, shareholders will have an opportunity to ask questions of the board and auditor, and we will also respond to questions that were provided prior to the meeting. If you wish to ask a question, please refer to the online guide, which is available on the Shareholders section of the Pepper Money website.
I will now pass over to Mike Culhane to formally open the meeting.
Thanks, John. Good afternoon, everyone, and welcome to Pepper Money's Annual General Meeting for the financial year to 31st of December, 2023. Our company secretary has informed me that a quorum is present, and so I will formally declare the meeting open. I am joined today by my fellow directors, Mike Cutter, Akiko Jackson, Des O’Shea, Justine Turnbull, and Rob Verlander, and Mario Rehayem, our CEO and Executive Director. A number of Pepper Money's executive team are also here today, including our CFO, Therese McGrath, and our general counsel and company secretary, John Williams. Also present is Delroy Nell from our external auditor, Deloitte Touche Tohmatsu. He is available to address any questions shareholders may have about the financial statements.
We are holding our AGM as a virtual meeting to allow as many of our shareholders in various locations around Australia and offshore to participate in the meeting today and have the opportunity to ask questions of the board and the auditor. Once we have concluded the addresses to the meeting by me and our CEO, Mario Rehayem, we will allow an opportunity for any general questions from shareholders. We will then discuss and vote on each of the resolutions contained in the notice of meeting. Shareholders will have an opportunity to ask specific questions relevant to each item of business before we vote on the resolutions. There are two ways you may ask questions today. First, you may type questions into the online platform. To do this, click Ask the Question and follow the prompts.
Online questions that are relevant to the business of this meeting will be read aloud to me by our company secretary. We may consolidate questions if we receive multiple questions on the same topic. The second way to ask is a question by phone. The phone numbers to dial in to ask questions have been given to shareholder participants in the meeting through the Lumi platform. These numbers are now on screen. Please dial the number and follow the prompts. I will now summarize the voting procedures. All items of business will be voted on by a poll, which is now open. If you did not cast your vote prior to the meeting, you may cast a live vote using the online platform. Please follow the prompts on the Lumi platform to cast your vote or refer to the online guide available on the company's website.
You may cast your live vote at any time during the meeting. Live voting on the online platform will close 5 minutes after the close of the meeting. I will give you a warning when this 5-minute period starts. At the conclusion of the AGM, you will see a red bar appear along the top of the online platform with a countdown timer of how long you have remaining to cast your vote. You must be logged onto the platform to cast a live vote. You cannot cast a vote over the phone. To confirm, when undirected proxies have been given to me as chair, I will vote in favor of the resolution to the extent permitted. During the meeting, we will display on the presentation slides the number of direct and proxy votes received prior to the meeting on each resolution.
The final results will be released to the market as soon as they are available. If you experience any difficulties using the online platform, the helpline is displayed at the top of the page. I will now deliver my AGM address to shareholders. Pepper Money's guiding principle has always been to help people succeed. Despite the headwinds of interest rate hikes and challenging macroeconomic and market conditions, Pepper Money achieved significant business and performance milestones through 2023. Overall, we delivered a net profit after tax on a pro forma basis of AUD 111.1 million for 2023. While NPAT was 22% below the prior comparable period, this was a solid achievement in a year that saw intense competition and continued global economic and geopolitical volatility.
Our Australian mortgage demonstrated resilience, delivering robust results, with originations amounting to AUD 3.9 billion in 2023. The competitive landscape for mortgages in Australia was particularly intense, especially during the first three quarters of 2023, with major banks vying for market share. Anticipating this environment, we shifted our focus in the latter half of 2022 to build share in our non-conforming segments. Consequently, the mix of originations for Australian residential mortgages shifted to 65% non-conforming in 2023, up from 48% in 2022. Although total originations for our mortgage business, including New Zealand, declined by 43% year-on-year, we began to see stabilization, with Q4 2023 originations growing 35% on Q3 2023... and 20% on Q4 2022.
Our asset finance division achieved record originations in 2023 of AUD 3.4 billion, marking a 20% increase on 2022. This growth was bolstered by our strong position in the electric vehicle sector and the robust performance of our novated lease channel. In late December 2023, we also successfully completed the acquisition of the New Zealand prime residential mortgage portfolio of HSBC. This acquisition brought an additional 2,004 customers into the Pepper Money fold and added NZD 1.1 billion in prime residential mortgages into the New Zealand business. Since its inception in 2000, Pepper Money has evolved into one of the largest non-bank lenders in mortgage and asset finance. We have an exceptional track record in debt capital markets, supported by a diverse investor base, both domestic and global, that contributes to fund our business.
From 2003 to the end of 2023, we have successfully raised over AUD 38.6 billion across 61 transactions. Our mortgage and asset finance securitization programs have consistently called every deal on the first available call date, demonstrating their strength. This robustness and the depth of our relationships with investors led to Pepper Money being awarded the prestigious KangaNews Australia Non-Bank Financial Institution Issue of the Year, 2023. An accolade based solely on polling participants in the Australia and New Zealand debt markets. Whole loan sales have been a long-standing component of our mortgage business's funding strategy. The substantial growth we've achieved in asset finance enabled us to expand the program to this asset class, culminating in our first whole loan sale at the end of 2023.
Whole loan sales generate value by selling the loans we've originated while retaining the servicing of the loans, thereby earning the business a continuous servicing fee and maintaining the same level of quality and service to the customer. Given the scale of our asset finance portfolio, with lending and servicing assets under management closing 2023 at a combined AUD 6.2 billion, a 31% increase on the prior comparable period, whole loan sales will continue to be a key part of the ongoing funding and capital management strategy for the asset finance business. Sustainability is deeply ingrained in Pepper Money's foundations. We strive to create sustainable value for our customers, employees, communities, and shareholders. In 2023, we made significant strides in developing a sustainable business model that benefits not only Pepper Money, but all our stakeholders.
Our foundational mission to help people succeed places people at the heart of our business. Diversity and inclusion have always been integral to Pepper Money's DNA, as evidenced by our employee profile. As of the 31st of December 2023, our team comprised of 55% females and 45% males, with 45% of our senior managers being female, compared to the 38% average in the financial services and insurance sector in Australia. Our average total remuneration gender pay gap stood at 22.9%, ahead of the industry comparison group of 31.1%. Our employees remained highly engaged, placing the company in the top 10% of companies globally with a 2023 engagement score of 75. Over 95% of our employees participated in our annual employee engagement survey.
The enduring strength of Pepper Money's employee engagement is driven by our culture and values of can-do, balanced, and real. Recognizing that culture and values are embedded across an organization when led from the top, we've launched the Pepper Money Leadership Principles in 2023. Our leaders provide guidance, inspiration, and motivation to support our people in achieving their goals. They help create a vision and rally our people around a common cause. The Pepper Money Leadership Principles underpin the behaviors we expect our leaders to role model to ensure the business achieves its strategic goals. Pepper Money has developed a deep understanding of customer niches, typically those underserved by banks. 2023 was a challenging year for many, including our customers, as household income was impacted by rising interest rates and inflationary pressures, as well as consumer confidence deteriorating.
Our robust credit underwriting capabilities and risk approach helped us maintain loan losses at a percentage of AUM at 0.28%, in line with the long-term average. The diligence that Pepper Money applies to the credit process help protect customers from over-committing. To date, Pepper Money has assisted 455,248 customers, and since our inception over 23 years ago, we have written off only 0.4% of the AUD 58 billion in loans originated. Pepper Money remains committed to good governance, transparency, and ensuring accountability is aligned across the business. We recognize the need to embed strong corporate governance and responsible lending, as these principles are fundamental to achieving our strategy and delivering on our mission. Our initiatives in response to climate change, implemented over several years, are progressing well.
In 2021, Pepper Money celebrated our 21st birthday by planting 7 hectares of trees across the markets we operate in, Australia, New Zealand, and the Philippines. As these trees continue to grow and mature, we are proud of how this gift is supporting a move to offset approximately 7,000 tons of CO2 emissions over 50 years. Our strong position in EV lending means we have financed 8,986 electric vehicles in Australia since we commenced this program in 2015, offsetting over 39,000 tons of CO2 emissions by the end of 2023, and projected to offset up to 236,000 tons over the lifetime of these vehicles. As we look ahead, we anticipate that market conditions will moderate the capital required to fund the business.
In response to these expected short-term trends, the board has explored opportunities to return capital to shareholders. Consequently, effective from the 2024 financial year, the board has revised the company's dividend policy to increase the annual payout to 30%-60% of pro forma NPAT, up from the previous 30%-40%. As part of this ongoing disciplined approach to capital management, the board also announced an on-market share buyback of up to 10% of the company shares over a 12-month period as another option to deliver returns to shareholders. Your board was pleased to announce a fully franked dividend for 2023 of AUD 0.05 a share, representing a payout of 37.5% of the pro forma net profit after tax for the period first of July to 31st of December, 2023.
This resulted in Pepper Money delivering total dividends of AUD 0.086 per share to shareholders for the 2023 financial year, yielding an annualized dividend of 6.4%. As you know from our notice of meeting, two of our directors are standing for election today, Des O'Shea and Mike Cutter. I will ask each of them to say a few words when we come to the formal part of the meeting. I would like to thank Mario and his executive team, and all of our employees across Australia, New Zealand, and the Philippines, who have contributed to the success that the company has achieved over the last 12 months. As announced earlier this month, this will be my last annual general meeting as the Chair of Pepper Money. I'm very proud to have founded our Australian business more than 23 years ago.
Over the years, there have been literally hundreds of key individuals who've contributed to the success of Pepper in Australia and globally. From our founding CEO, Richard Clemmer, to our current CEO, Mario Rehayem, leading based on Pepper's core values has been central to our success. We have also had the benefit of great shareholders over the years, beginning with the Texan-based group at the formation of the company in 2000, all the way through to Seamus Dawes becoming a key shareholder in 2010, and then KKR helping to take us private in 2017. Over the past six years, KKR has helped us build out globally, and in particular, have provided the growth capital to the Australian business that allowed us to go public again in 2021.
That all being said, it is the day-to-day blocking and tackling, the team all pulling in the same direction, and the hundreds of thousands of customers we have helped in Australia that makes me the most proud. Pepper and firms like Pepper have allowed hardworking Australians to fulfill their dreams by buying a family home where others couldn't help. The same goes for the asset finance business. Ken and his team have built an incredible platform that, by using cutting-edge technology, allows Australians to buy a vehicle at a great cost of finance, and in many cases, where financing is not available from other providers. So more than two decades on, I leave the business in a very strong position, led by a wonderful, talented, handpicked, and long-tenured management team, of whom I am immensely proud. I'm highly optimistic about the future prospects for the business.
Akiko Jackson has been elected by the board as the successor chair. Akiko has been part of the board since we went public again in May 2021, and she and her fellow board members have been absolutely phenomenal to work with. I know that Akiko will continue to carry the Pepper torch with aplomb, and the entire board are 100% behind her. I will ask Akiko to say a few words after Mario has completed his address. On behalf of the board, I extend our gratitude to shareholders for their continued support of our business through their investment in the company. We also wish to express our appreciation to our partners, both business and community, who contribute significantly to shaping Pepper Money into the company it is today. I will now hand over to Mario to give his address.
Thanks, Mike, and good afternoon, everyone. Before I turn to provide some comments on 2024 and the operating outlook, I would like to just run through some of our key highlights for 2023. We delivered originations of AUD 7.3 billion, and while 24% lower than the prior comparable period, we achieved record asset finance originations of AUD 3.4 billion, up 20% on PCP. While mortgage originations at AUD 3.9 billion were down 43% on 2022, market conditions started to show signs of stability over the latter part of calendar year 2023, as major banks started to wind down cashback offers. The decline in originations started to plateau, and our second half mortgage originations of AUD 2.2 billion grew by 28% on the first half of 2023.
Total AUM, which is a key foundation of future profitability, closed 2023 at AUD 19.7 billion, the highest the business has achieved in its history. Lending AUM at AUD 18.3 billion was marginally up from 2022 close. Servicing AUM, which includes the AUM transferred under our whole loan sale program at AUD 1.4 billion, was up 43% on prior comparable period. Funding is a core competency of the business. Over 2023, we raised a record AUD 5.4 billion in the public markets, up 7% on 2022. In addition to our seven public securitizations, we raised a further AUD 1.6 billion in private term securitizations and whole loan sales. Warehouse capacity closed the year at AUD 9.3 billion, and we have continued to maintain 4-6 months headroom, meaning we are well-positioned to capture growth as it returns.
The diversification of the portfolio continues to deliver benefits, as we were able to capture growth opportunities in asset finance as market conditions remain soft in mortgages. Asset finance has grown to contribute 43% of total operating income in 2023, up from 37% last year, with mortgages now at 55%. We continue to be disciplined in credit risk management. The increase of 6 basis points in loan loss as a percent of lending AUM on PCP was driven by mix, with asset finance AUM as a percent of total lending AUM increasing from 26% in 2022 to 31% in 2023. Loan losses as a percent of AUM remain within long-term averages. Customers are at the forefront of how we do business, given our mission to help people succeed. Our customer well-being forms part of this mission.
Alongside welcoming 89,000 new customers to Pepper Money over calendar year 2023, we also made it a priority to incorporate proactive practices to help our existing customers navigate increasingly difficult economic conditions, which we all experienced over the last year as both interest rates and inflation rose. Our customer value proposition is demonstrated through our customer net promoter scores. In 2023, we saw increases in product advocacy across all core Pepper Money products, with results considerably ahead of the industry. I've spoken in the past about how we have built a scaled technology platform supporting automation. This, coupled with our disciplined approach to cost management, saw normalized pro forma operating expenses increase by 1%, from AUD 155.9 million in 2022 to AUD 157.7 million in 2023.
Normalizing removes the impact of Stratton, acquired 1 July 2022, from the operating cost base, as well as the pro forma costs of acquisitions. Pro forma NPAT for 2023 at AUD 111 million was 22% below PCP, with lower volumes in mortgages coupled with swap rate volatility, increased provisioning for loan losses as asset finance AUM grew, all impacting profit flow-through for 2023. Turning now to 2024. I'm encouraged by the general trends we are seeing to date in 2024. Stability is returning to the mortgage market as the intense competition among the major banks experienced over the second half of 2022, and for most of 2023, has now eased.
Equifax recently reported that refinance activity had dropped 32% in Q1 2024 on PCP, and I believe this is an outcome from the market cooling and banks retreating from cashback and low ROE mortgage offerings. While still early days, we are starting to see demand in mortgages pick up, with our application growth returning. For the first quarter of 2024, our mortgage applications increased by 9.5% on Q1 2023. This application growth is being supported in part by new products, with our self-managed super fund product, launched October 2023, performing ahead of plan. Likewise, we are seeing strong application growth in our small balance commercial real estate product. Customers continue to prove resilient and are managing well in a more challenging environment. Some relief will also come later this year, given the tax cuts that will roll through from July.
Stability is returning to funding spreads. To date, we have executed on two public term securitizations. Our first RMBS in 2024 priced 30 basis points inside of the last deal done in 2023, and our first ABS for 2024, SPARKZ 8, had a weighted average margin of 1.75%, compared to SPARKZ 7 in August 2023 at 2.20%. These trends in both the markets we serve and in capital markets is helping net interest margin, and we are seeing the rate of compression really start to ease. We continue to keep a watch on a number of market and macro factors. Inflation is proving to be a lot stickier than what both the RBA and economists expected. This continues to place pressure on discretionary spend.
Equifax noted in their quarter one Consumer Credit Insights report that auto loan 30-plus arrears is now surpassing pre-COVID levels, with a notable jump in late-stage arrears. While we are still inside long-term average for credit performance, we are keeping a close watch on asset finance loan performance. Pepper Money remains, as always, disciplined in how we are managing between growth and value, managing credit performance by balancing between risk and returns, driving operational efficiency to deliver improved underlying margin, and how we continue to introduce new products that create financial inclusion for the underserved people of Australia and New Zealand. Before I hand back to our chair, I would like to express sincere thanks on behalf of the board, the business, and myself personally, for the enormous contribution Mike Culhane has made to building Pepper Money to the company it is today.
Mike founded Pepper back in 2000. It was through his dedication and focus on identifying and driving market opportunities that saw Pepper Money move from a specialist lender to the diversified scaled business it is today... I have personally learned so much from Mike. He has always been there to both guide, support, and importantly, to challenge myself and the wider business. He has truly been instrumental in making Pepper Money the success it is today. I now hand back to our chair, Mike Culhane.
Thank you, Mario, for those very kind words and the update. Before I move to the meeting agenda, I would like to take this opportunity to introduce the incoming chair, Akiko Jackson. Akiko has been an independent non-executive director of Pepper Money since we listed the business in May 2021. Akiko is an internationally experienced non-executive director and strategy advisor, with more than 30 years experience as an executive in the financial services industry in Australia and Japan, and as a strategy manager consultant in the U.S. and Australia. Akiko is highly qualified to take on the role of chair and is supported by one of the best boards I've had the pleasure of working with. I would now like to invite Akiko to say a few words.
Thank you, Mike. I would first like to acknowledge your enormous contribution to the success of Pepper Money since you founded the business over 23 years ago. You should be extremely proud of the business you have built. Of course, not just Pepper Money in Australia and New Zealand, but all of the Pepper businesses globally. It really is a remarkable achievement and a testament to your leadership. On behalf of the board, management, and our staff, I would like to thank you for everything you have done over the last two decades and wish you all the best for the future. I'm honored to have been elected by my fellow directors to take on the role of chair, and I look forward to working with the board and with Mario and his team to continue to deliver on the company's strategy. Thank you.
Thanks, Akiko. Appreciate those kind words, and I will now turn to the formal business of the meeting. The first item of business is to receive the company's financial report for the financial year, ended 31st of December 2023. Mario and I have already discussed in some detail the company's financial performance over 2023 in our address, but are happy to respond to any questions from shareholders. As noted at the beginning of the meeting, Delroy Nell, representing our external auditor, Deloitte Touche Tohmatsu, is also available to take questions about the conduct of the audit and the preparation and content of the independent audit report. There will be no vote on this item. It is a discussion item only.
I will now take questions received through the online platform about the company's financial statements, the performance of the company over the year, the directors' report or the auditors' report, and as there is a separate agenda item dealing with the remuneration report, I'll address questions about remuneration matters when we consider that item of business. John, can you read, sorry, any questions received?
Thanks, Mike. We had one question from a shareholder prior to, received prior to the meeting, Mr. Sepevand. Why has the employee benefit expense grown 13% when the operating income has fallen 4%? How is this sustainable?
Yeah, thanks, John. There's actually some noise in the cost base, given that the prior comparable period did not include the Stratton acquisition and the run rate. So if you normalize the Stratton, pro forma operating expenses grew actually only 1% on the PCP, with staff expense increasing 3%, marketing reducing by 21%, and technology declining by 9% year-on-year. Operating income was actually negatively impacted by a softer mortgage market, as well as historically high attrition rates driven by intense bank competition. However, these conditions have actually improved since December of 2023, and we remain focused on our cost base and leveraging our operating platform in what we expect will be a more easy operating environment, particularly in our mortgage business. Any questions from the phones, John?
Thanks, Mike. We've received some online questions from Stephen Mayne. The first one is-
Okay.
After being floated at AUD 2.89, Pepper Money shares are today at AUD 1.46. Does the Chair believe the perceived overhang of KKR's 60% stake is contributing to the poor share price performance? Well done on the 10% buyback, but wouldn't it be better if KKR just sold out completely to eliminate the overhang?
Thanks, John, and thanks, Stephen, for that question. Obviously, again, we can't comment on KKR's intentions. So, you know, just can't respond to that. In terms of the share price itself, there are obviously many external factors, particularly since we've been public, that are outside of our control. I think what we are focused on is how we deliver our strategy, how we look after our team, how we look after our customers, and how we build a robust business over the long term. And I feel we are delivering on all those counts. In terms of ANZ Holdco, which in turn KKR own a big piece of, as I mentioned, you know, we're not privy to their intentions. I do know, however, that they remain highly supportive of our business... The next question, John?
Thank you. Another question from Stephen Mayne. Why are so many blue-chip Australian banks, such as Macquarie, getting out of the car finance market? Is it because of increased regulations following from the Hayne Royal Commission and reputational risks from potentially having to repossess assets of debt-laden borrowers? Also, how hard is it to compete with the big car manufacturers who also offer finance? And what is our relationship like with Eagers Automotive, a prestigious car dealer?
Yeah. In terms of, you know, why banks are getting out of car finance, you know, my understanding on that particular point from, at least from an external observer, but it's been a fact pattern that's existed really since 2015, is that the regulatory capital requirements to be in the auto finance business, if you're a bank, have ratcheted up over the last several years. Actually predating the Royal Commission. And so you saw originally with, I think the first one to get out was Lloyds, and then a number followed on from that. Most recently, Macquarie, which is very recent. And the reg cap is the real driving force. It's a one-to-one reg cap, so just not capital efficient for them to be in that business.
In terms of the question around competing with OEMs or manufacturers, we don't typically focus in the new car space. There are some manufacturers we work with, but predominantly what we do is in the used car space. So we don't really come up against those, you know, very aggressive, upfront, low financing deals that you see offered by some of the bigger manufacturers out there. So that's not really an issue for our business. And maybe as it pertains to Eagers, or maybe I'll turn that to Mario, if he has anything to add there.
Yeah, sure. Thanks, Mike, and thanks, Steve, for the question. With regards to Eagers and many of the larger dealership groups, we do have a strong relationship with a number of them, and we're not wedded to any one dealership. It's part of our distribution network. And we have a good working relationship with all of our dealer groups.
Thanks, Mario. Any, any other questions, John?
We have another question from Stephen Mayne. Just like last year, why did you run a fully virtual AGM rather than a hybrid AGM, so that your 4,000 retail shareholders would have an opportunity to meet the directors? Will you commit to doing a hybrid next year, as is a best practice for maximizing shareholder access and participation? Also, please offer a video feed next year rather than just audio. Will you undertake to publish a full copy of the audio file on your website for the 99% of shareholders who are unable to attend today's meeting live?
Yes. We will, we will give a full recording on the website of the webcast. As it pertains to hybrid, we do have quite a diverse group of shareholders, both geographically and directors geographically, but, you know, I hear your point on that. We, we thought about it carefully before this particular meeting. We considered it, we decided to do all virtual. But yeah, we will take it under advisement and think about that for next year. Number one, video feed. Yep. Well, thankfully, I'm resigning, Stephen. You won't have to see my face next year. You'll see Akiko's and everybody else's, but I'm sure that's something that we can think about during the course of the next 12 months, but I appreciate your input. Any more questions, John?
There's one further one from Stephen Mayne. Congratulations to Akiko Jackson on her appointment as chair. It's disappointing that only 14% of ASX 200 companies have a female chair. Could Akiko and Mike please comment on the selection process that saw Akiko selected? Did she join the board with a view to becoming chair, or did it only emerge as an option over time? Were any external candidates considered?
Mike's call dropped off. He is calling back in. If we could just take one minute, please. John, in the absence of Mike, maybe we pass to Justine to talk through, as chair of the Rem committee, the selection process.
Thank you. Thanks very much for that question. As Therese has alluded to, recruitment of directors is the responsibility of the Remuneration and Nomination Committee, and the process is undertaken in accordance with the charter of that committee. Akiko has been a director since the listing of Pepper Money, and she didn't join with the aim of becoming the chair, but she is the person, on Mike's departure, who was unanimously voted into that position by the board. We didn't look externally for a chair because we were very satisfied with Akiko in that position. In terms of a replacement director, that appointment is made under the terms of the relationship deed that Holdco, Pepper Holdco, which is KKR and Pepper Money have.
So Holdco nominates the appointment of up to three directors. Mike was a nomination of Holdco, as is Des O’Shea, and in replacing Mike, the incoming director is the one who's been nominated by Holdco, and that's VP. I think I've answered all of that question, John?
Thanks, Justine.
Thanks, John. Any more questions or questions from the phone?
Can the operator let us know if there's any questions online, on the phone?
There are no phone questions for this resolution.
Thank you. We now move to consider each of the resolutions that were included as part of the notice of meeting for the AGM. Resolution number one. The first resolution is to consider the remuneration report, which commences on page 58 of the 2023 annual report. The remuneration report sets out the board's assessment of management's 2023 performance against the objectives established at the start of the year. The resolution on this item is advisory, but we will take shareholder feedback into consideration when formulating the company's future remuneration policies. I will now take questions on this item of business received through the online platform.
There's one question from Stephen Mayne: Could the CEO summarize his past LTI grants and whether they have vested or lapsed? Also, has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company? Please don't say, "Look it up in the annual report and through ASX announcements." It's complicated, including pre-IPO issues, and the CEO could factually summarize the situation in 60 seconds.
Unfortunately, I can't do it justice in 60 seconds, which I am going to, unfortunately, refer you back to the actual, remuneration report, but specifically to page 81 of the 2023 annual report, section 5.2 of the REM report. With regards to my share holdings, or if I've sold any shares, I can confirm that I haven't sold any shares, or acquired any shares, during this period, in post-IPO.
Thank you very-
Obviously, outside of my incentives.
Thanks, Mario. John, any further questions on this topic or any questions from the phones?
I know there are online questions.
There are no further questions.
Great, thank you. The direct votes and proxies received for this resolution are now shown on the presentation slide on your screen. After polls close at the end of this meeting, votes cast today will be added to these votes and proxies, and the final result will be lodged with the ASX. Okay, turning to resolution number two. This is the re-election of Des O’Shea as a director. Des is an independent non-executive director of Pepper Money and was appointed to the board in May 2021, just prior to the company's listing. Des is standing for re-election today to ensure the company complies with the ASX listing rules, requirement that a listed company, which as directors must hold an election for directors each year. I will now ask Des to say a few words about his re-election.
Thanks, Mike. It's been an honor to be a member of the Pepper Money board since listing in 2021, and to have been involved as a director with Pepper's global businesses, for a decade, and to where I continue to be working with yourself. I believe my deep knowledge of Pepper Money, allied to the insights and experience from working with consumer finance businesses and banks globally for over 40 years, complement the diverse skill sets my fellow directors bring to the board. I look forward to working with them and the Pepper Money management team into the future, and thank the board and shareholders for their support in my re-election.
Thanks, Des. So the directors, with Des abstaining, unanimously support his re-election. I'll now take any questions on this item of business received through the online platform. Anything from you, John? Anything from the phones?
No, no, no questions.
There are no phone questions.
The direct votes and proxies received for this resolution are now shown on the presentation slide on your screen. After polls close at the end of this meeting, votes cast today will be added to these votes and proxies, and the final result will be lodged with the ASX. I now turn to resolution three. The next item of business is the re-election of Mike Cutter as a director. Mike is an independent non-executive director of Pepper Money and was also appointed to the board in May 2021, just prior to the company's listing. Mike is standing for re-election today to ensure that the company complies with the ASX listing rules requirement, that a listed company, which as directors, must hold an election of each year. Maybe you could talk about your bio a little bit, Mike, and talk a few words about your re-election.
Thank you, Mike, and thank you, shareholders, for the opportunity to speak to you today as I seek your support for my re-election to the board of Pepper Money. I've enjoyed working with the rest of the board at Pepper Money since the listing in May 2021, as Mike just mentioned. And I think that leveraging my 35 years plus experience in various executive roles in consumer finance, banking, and the insurance business throughout Australia, New Zealand, and the U.K., I believe I've made a valuable contribution to the board so far and will do into the future, particularly in my role as the chair of the Audit and Risk Committee. I look forward to continuing to work with my fellow directors over the coming years. Thank you.
Thank you very much, Mike. Any questions on the phones? Any questions, John, online?
Nothing online, Mike.
There are no phone questions.
The director votes and proxies received for this resolution are now shown on the presentation slide on your screen. After polls close at the end of this meeting, votes cast today will be added to these votes and proxies, and the final result will be lodged with the ASX. Now turning to resolution four. The next item of business relates to the grant of 1,183,394 rights under the executive rights plan to the company's Chief Executive, Mario Rehayem. I will now take questions on this item of business received through the online platform. Anything from you, John?
No questions, Mike.
Operator, any questions?
There are no phone questions.
Okay. The direct votes and proxies received for this resolution are now shown on the presentation slide on your screen. After polls close at the end of this meeting, votes cast today will be added to these votes and proxies, and the final result will be lodged with the ASX. Now, turning to resolution 5. This next item of business relates to the grant of 172,220 restricted rights under the short-term variable remuneration plans and the company's Chief Executive Officer, Mario Rehayem. I will now take questions on this item of business received through the online platform. Any questions, John?
We have one question from Stephen Mayne, Mike. 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? Do they all follow us? If so, what reasons do they give for any against recommendation? Thank you for disclosing the proxies early performance. Why was there a 9% protest vote against item five, involving the CEO's incentive grant?
Yeah. Just in terms of the proxy advisors, and they, I think they all follow us. There could be... I'm not sure if I'm correct, they all follow us, Therese, or John, but, you know, most of them-
No, we're only aware of two.
My understanding.
Yes.
Two. I'm sorry. Two. Okay, okay. I think the fundamental point I would make here is we don't comment. They play a very important role for sure, and I'm sure many shareholders rely on the views in terms of, you know, finally forming their own opinion. But we're not going to comment on recommendations that they have to their individual clients. I think in terms of the voting, you know, we would point out that more than 90% of shareholders voted for all resolutions here. Of course, shareholders are entitled to their views, and they have them, and so we see that expressed from time to time, but we're very confident that with 90% plus, we're more than squarely on the right path here. Any other questions, John?
No, there are no further online questions.
There are no phone questions.
Any questions from the... Okay, thank you. Thank you, everyone. I think this concludes the business for the meeting. I'll just wait a minute for any final votes on the resolutions to allow the shareholders and proxy holders to submit final votes through the online platform. Okay, thank you. We will now close the polls for voting on each resolution, and I'll also declare the AGM closed. The results of today's AGM will be released to the market and made available on the ASX website as soon as possible, which should be later on this afternoon. If shareholders have additional questions that have not been addressed in today's meeting, please submit them to us. For questions relating to your shareholding, please contact the registry directly. Once again, thank you for participating in today's meeting, and thank you for your support of Pepper Money.