The government-run Future Fund targeted some of the biggest S&P/ASX 200 Index (ASX: XJO) retailers during 2020/2021, pushing back against remuneration policies and equity grants.
As of 30 September 2021, Future Fund manages $248 billion of Australia's wealth to strengthen the country's financial position.
Thus, it owns shares in many of the ASX's largest companies. And, according to reporting by The Australian, it's holding them to account.
Let's take a look at how the fund is reportedly throwing its weight against "creative accounting".
Here's why some ASX 200 retailers were targeted
According to The Australian, the Future Fund voted against nearly 50 ASX companies' remuneration reports and bonus schemes in 2020/2021.
Harvey Norman Holdings Limited (ASX: HVN) earned itself one such vote, with the fund reportedly disagreeing with its remuneration report.
It also voted against the remuneration report of Premier Investments Limited (ASX: PMV).
Meanwhile, it disapproved of an equity grant proposed to be paid to CEO and managing director of Super Retail Group Ltd (ASX: SUL) Anthony Heraghty.
Future Funds doesn't comment on votes it casts against companies' remuneration reports, equity grants, or board elections.
However, a position paper published in August 2020 stated:
[B]oards should consider applying a basic 'pub-test' which may suggest that some of the pain felt by staff below executive management ranks should also be applied to the remuneration outcomes of key management personnel…
Boards should not strip out the COVID-19 impact when assessing performance or apply 'creative accounting' to adjust for the impact of COVID-19 (e.g., taking COVID-19 expenses below the line for remuneration purposes).
The board is especially mindful of undue windfall gains. The board would not want to see management protected from the downside impact of COVID-19, but not restrained on the upside.
It wasn't just retailers who were on the Future Fund's hook over 2020/2021.
The Australian reports the fund voted against an equity grant for Commonwealth Bank of Australia (ASX: CBA) CEO and managing director Matt Comyn.
It also voted against Star Entertainment Group Ltd's (ASX: SGR) remuneration report and an equity grant proposed for its CEO and managing director Matt Bekier.
