Who must comply with Two-strikes rule on listed-company remuneration report (s 250R)?

If a remuneration report attracts 25%+ no votes twice running, a spill resolution must be considered.

At every listed company's AGM a resolution that the remuneration report be adopted must be put to the vote (Corporations Act 2001 s 250R(2)). The vote is advisory and does not bind the directors, and key management personnel named in the report and their closely related parties must not vote on it except as directed proxies (s 250R(4)-(5)). The chair must give members a reasonable opportunity to ask questions about, or comment on, the report (s 250SA). If at least 25% of votes cast are against adoption at two consecutive AGMs (the 'two strikes'), and no spill resolution was put at the earlier AGM, a spill resolution must be put at the later AGM (ss 250U-250V). If it passes, a spill meeting must be held within 90 days, at which the directors in office when the directors' report was approved (other than a managing director who may hold office indefinitely under the listing rules) cease to hold office and their positions are put to election (s 250W).

Applies when the business has an ASX listing.

How the regulator frames it: Listed companies (included in an official list of a declared financial market, such as ASX), their directors and the chair of the AGM, and key management personnel and their closely related parties in casting votes.

What triggers it: Holding an AGM as a listed company; a second consecutive vote of 25% or more against adoption of the remuneration report triggers the spill resolution.

Jurisdiction: Commonwealth law, so the test is the same in every state and territory.

Outcome across the 35 industries Rules Mate maps (35 of 35: no).

The answer is the same in every industry: no. Industry does not change who must comply.

Structure does not change the answer across all industries: for every structure the answer is "no".

Size does not change the answer across all industries: at every size band the answer is "no".

Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:

• Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: does not apply. Requires an ASX listing.

Starting from a small or large professional services company that does not otherwise meet the test, each of these single facts changes the engine's answer:

• The business is listed (or listing) on the ASX: it then applies (ASX-listed (or preparing to list)).

When due

At each AGM; after a second strike, the spill resolution is put at that AGM, and if it passes the spill meeting must be held within 90 days, subject to the 28-day notice period for listed company meetings (s 249HA). The company must still have at least 3 directors after the spill meeting (s 250X).

Frequency

Annual

Evidence to keep

Notice of meeting informing members of the remuneration report resolution (s 249L(2)(a)); proxy forms and voting records showing key management personnel exclusions; AGM minutes recording questions on the report; poll results; where a spill resolution passes, notice of and minutes for the spill meeting and signed director consents.

Status

Current

Priority

Medium

Maximum penalty: A key management personnel member, or closely related party, whose vote is cast in breach of s 250R(4) commits an offence (s 250R(7)), and the vote is disregarded. If a passed spill resolution is not followed by a spill meeting within 90 days, each director at the end of that period commits a strict liability offence (s 250W(5))

Rules Mate has not yet classified the audit or assurance level for this obligation. Any audit, review or certification requirement is set by the regulator source listed below.

If this obligation applies to you, so do these 5: the engine uses the same rule for each.

• Comply with ASX continuous disclosure (Listing Rule 3.1)
• Apply 'if not why not' against ASX Corporate Governance Council Principles &
• Maintain insider trading policy + share trading window (listed entities)
• Lodge a prospectus for offers requiring disclosure
• ASX-listed entity board independence + composition (CGC Principle 2)

Rules Mate tracks 4 published obligations tagged "corporate governance", 1 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 0 of those apply outright. This obligation is rated medium priority, and is a annual obligation.

Regulated by Australian Securities and Investments Commission.

ASIC: Corporate regulator administering the Corporations Act, financial services and credit licensing (AFSL/ACL), markets supervision, insolvency, and registries (ASIC and ABRS).

• Australian Securities and Investments Commission

Corporations Act: The foundational federal Act for Australian corporate law.

• Corporations Act 2001

Free tools that help with this obligation:

• Compliance calendar builder