Atlas Arteria avoids board spill as shareholders pave way for second IFM board seat
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The news: Atlas Arteria avoided a board spill at the company's annual general meeting and successfully increased the size of its board from seven to eight seats, paving the way for major shareholder IFM to increase its board presence.
The context: Atlas Arteria received enough votes on its remuneration report at its AGM avoiding a second strike on the resolution. Last year, IFM voted against its remuneration report resulting in 51% voting against the resolution.
On Tuesday, IFM increased its ownership of Atlas Arteria by to 27.15%, from 24.54%. Atlas chair Debbie Goddin noted IFM voted in favour of all resolutions and was allowed to creep 3% every six months and still had some capacity.
Shareholders also voted in favour of a resolution for the company to increase its board to eight directors, from seven, as a pathway for IFM to install a second representative on the board.
While IFM nominated its global head of asset management, infrastructure, Danny Elia, to the board prior to the AGM, it was not part of the resolutions. Goddin said the board had not met with, or conducted standard due diligence on any second IFM director nominee, or agreed with IFM any shareholding thresholds or corporate governance arrangements appropriate for a second nominee.
Self-described shareholder activist Stephen Mayne questioned IFM’s current board representative Ken Daley — who is a special adviser to the IFM Global Infrastructure Fund (IFM GIF) — on his relationship with Elia.
"Could Ken please explain his relationship with Danny Elia, the IFM executive that they are putting up to join him on the board? Will he be the boss in terms of determining tactics? Is he the main man Ken reports to at IFM on our company?" Mayne asked.
Daley said while they had worked together 10 years ago at Transurban he “had nothing substantially to do with Danny since that time”. Daley noted he did not report to Elia in any form and his contract with IFM GIF was not part of Elia’s area at IFM. He said he did not believe there was any conflict if there was a second IFM appointment to the board.
IFM and Atlas Arteria’s relationship has been strained in the past when Atlas proposed to purchase a 66.6% stake in Chicago Skyway in 2022 for $2.9 billion. IFM tried to stop the purchase by sending a letter that warned it would try to spill the board if the deal went ahead. IFM was against the deal as it believed the purchase would be significantly value destructive. Despite the objections, Atlas Arteria went through with the deal.
The source: Atlas Arteria AGM
