Why the AGL (ASX:AGL) share price is in focus on Monday

The AGL Energy Limited (ASX: AGL) share price is on watch today as a series of happenings continue to put pressure on the energy producer.  

Today, the energy giant has officially exited the S&P/ASX 50 Index (ASX: XFL) after its share price fell more than 20% over the September quarter.

In addition, reports of the company’s annual general meeting (AGM) are circulating this morning. The company’s board reportedly might struggle to push its renumeration report through a shareholder vote on Wednesday.

Last year, AGL’s AGM saw 46.5% of shareholders vote against the renumeration report. Thus, the resolution was hit with a ‘first strike’. Should 25% or more of shareholders vote against this year’s renumeration report, they’ll be given the chance to spill the board.

Also, shareholders may be voting for a resolution which would see the company forced to disclose emissions targets in line with the Paris Agreement.

The AGL share price finished Friday’s session trading at $5.52, 6.6% lower than Thursday’s close.

Let’s take a closer look at what could be weighing on the AGL share price today.

All eyes on AGL’s AGM

The AGL share price will be in focus on Monday as the company’s AGM approaches.

The company’s been banished from its spot amongst Australia’s top-50 listed companies ahead of its potentially divisive AGM.

AGL’s 2021 renumeration report will go to shareholder vote on Wednesday.

The Australian Financial Review has today reported proxy advisors Institutional Shareholder Services (ISS) and CGI Glass Lewis have recommended clients vote in favour of the resolution. The two advisors were both against AGL’s renumeration report last year.

Meanwhile, the Australian Shareholder Association (ASA) will vote all undirected proxies against the renumeration report. It will also vote against the granting of performance rights to AGL’s CEO. It claims the motions don’t support the direction needed for AGL to recover from its current situation.

ASA believes the biggest issues of the AGM will be the AGL share price’s struggles and the company’s decreasing profitability. In a statement ASA commented:

We see the removal of the return on equity hurdle for the long-term incentive and reduction in weight to the carbon transmission hurdle after receiving a first strike on its remuneration report in 2020 as not supporting the direction the company needs to make in its current situation.

Additionally, as The Motley Fool Australia reported on Friday, the Australian Shareholder Association (ASA) will be voting in favour of resolution 6b, against the advice of AGL. The AFR reports ISS will also be voting in favour of resolution 6b.

If passed, resolution 6b will see AGL forced to disclose carbon emissions targets in line with the Paris Agreement. Though, resolution 6b is contingent on resolution 6a passing a shareholder vote.

All named proxy firms and bodies reportedly plan to vote against resolution 6a.

AGL share price snapshot

The AGL share price has fallen a huge 54% so far this year.

It is also currently 60% lower than it was this time last year.

The post Why the AGL (ASX:AGL) share price is in focus on Monday appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. 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 Bruce Jackson.

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