AGL share price slips amid Cannon-Brookes' board victory

The tech billionaire has chalked up a second win over the energy giant's board.

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Key points

  • The AGL share price has handed back its earlier gains on Tuesday, falling 0.3% to trade at $7.675 at the time of writing 
  • It comes amid news all four nominations Mike Cannon-Brookes put forward for the company's board were elected by shareholders 
  • AGL is also likely to receive a 'first strike' on its remuneration report 

The AGL Energy Limited (ASX: AGL) share price popped then dropped on Tuesday amid news all four of Mike Cannon-Brookes' nominees have been elected to the company's board.

The win is in defiance of the majority of the board's recommendations.

It also marks the activist shareholder and billionaire's second major victory against the energy giant. Cannon-Brookes famously led a campaign against AGL's ultimately scrapped demerger plan in May.

The AGL share price turned an earlier tumble into a gain this morning. The stock plunged 0.5% to $7.66 in early trade before leaping 0.65% to $7.75 shortly after today's release.

However, at the time of writing, the AGL share price has slipped back into the red. It's now trading at $7.675, 0.32% lower than its previous close.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 0.4%. The S&P/ASX 200 Utilities Index (ASX: XUJ) has also fallen 0.08%.

Let's take a closer look at the win chalked up by newly instated AGL directors Mark Twidell, Dr Kerry Schott, Christine Holman, and John Pollaers.  

All 4 Cannon-Brookes nominees appointed to AGL board

Atlassian Corp (NASDAQ: TEAM) co-founder and co-CEO Cannon-Brookes has won another battle against the AGL board, the company's chair Patricia McKenzie revealed at its annual general meeting (AGM) today.

All four nominees Cannon-Brookes' investment vehicle Grok Ventures put forward to the company's board were elected based on proxies lodged ahead of the meeting. Of the newly appointed directors, only Twidell was endorsed by the board.

McKenzie commented today:

The board welcomes these new directors … and will work constructively with them in the best of interests of shareholders.

She also revealed AGL will likely receive a 'first strike' on its remuneration report after "a couple of large shareholders voted against it". McKenzie continued:

This is a disappointing result given that all major proxy advisors recommended that shareholders vote in favour of the report and no material concerns were identified.

However, we will take this outcome into account when we review our remuneration structure during FY23 to consider opportunities to further align the structure with company performance and long-term shareholder value.

A first strike occurs when more than 25% of shareholders vote against a remuneration report.

Looking more broadly, the AGL chair recognised what was "a difficult year for AGL". 

However, the company's board is said to be confident it can move forward with "the right strategy … to deliver reliability and affordability of the NEM, value to shareholders, and an accelerated decarbonisation pathway."

AGL recently revealed a renewed strategy that would see it ditching coal by 2036 – a decade earlier than planned. The plan could see the company forking out $20 billion for new generation and firming capacity between now and then.

AGL share price snapshot

Despite today's slump, the AGL share price has been performing well recently.

The stock has gained 22% since the start of this year. It's also currently 46% higher than it was this time last year. Though, looking further back, the AGL share price has dumped 69% over the last five years.

Comparatively, the ASX 200 has fallen 6% year to date and 4% over the last 12 months. It's 20% higher than it was in November 2017.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Atlassian. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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