AGL Energy Limited (AGL) refers to the announcement made on 30 June 2021, which confirmed AGL’s intention to undertake a demerger to create two leading energy businesses with separate listings on the Australian Securities Exchange. Under the proposed demerger, AGL will become Accel Energy Limited (Accel Energy) and a new entity, AGL Australia Limited (AGL Australia), will be demerged. As part of that announcement, AGL confirmed that Graeme Hunt had been identified as the Managing Director & CEO of Accel Energy and Christine Corbett had been identified as the Managing Director & CEO of AGL Australia.

AGL advises that the terms of the service agreements for each of Mr Hunt and Ms Corbett have now been finalised and a summary of the material terms of those agreements are set out in the Attachment. During this finalisation process, it was determined that Graeme Hunt would be appointed Managing Director & CEO of AGL on a fixed term permanent basis, effective 1 July 2021. Both remuneration packages were determined having regard to independent expert advice, comparator group analysis for each role and the relative experience of Mr Hunt and Ms Corbett.

Peter Botten, AGL Chairman said “Graeme is a highly experienced CEO and we are pleased to confirm his permanent appointment as Managing Director & CEO of AGL.

When Mr Hunt was appointed to the interim Managing Director & CEO role in April 2021, his fixed remuneration was set at a similar level to the previous Managing Director & CEO, and the Board determined that he would not participate in either the short term or long term incentive plans given the interim nature of his role. In lieu of these incentive plans, restricted shares to the value of $600,000 were to be allocated to Mr Hunt in FY22.

To reflect his permanent appointment and to align Mr Hunt’s incentive arrangements with company performance, Mr Hunt will now be eligible to participate in AGL’s Short Term Incentive Plan for FY22 and, subject to shareholder approval, the FY22 Long Term Incentive Plan. Having regard to Mr Hunt’s participation in AGL’s FY22 incentive plans, the value of the restricted shares to be allocated to Mr Hunt has been reduced from $600,000 to $165,354 to reflect the interim period of Mr Hunt’s appointment between April and July.”

Update on Board Succession

Given the transition of Graeme Hunt from Chairman to Managing Director & CEO and the retirement of John Stanhope at AGL’s AGM in September, the Board is currently undertaking a process to consider additional appointments to the Board of AGL in FY22, including the appointment of a Director with expertise in climate change risk, ESG governance and industry transition.

The proposed demerger of AGL requires the consideration of the composition of the Boards of each company to ensure that each Board (and each Board committee) has the skills and experience to fulfil their responsibilities on implementation of the demerger. The Board is working carefully through a structured process to identify Directors with skills and experience in climate change risk and ESG, energy markets, environmental issues, digital retail, technology, customer markets and other relevant skills and experience that will be required for the demerged entities.

On the topic of Board succession planning Mr Botten said “The Board understands the critical importance of the decarbonisation of the energy sector and the acceleration of the energy transition. We are aiming to appoint a Board member with specialist skills in this area in the first half of FY22”.

Authorised for release by AGL’s Board of Directors.

Read the ASX release here