Tower Limited, Annual Meeting 2026

13 February 2026

Tower Limited (TWR)

The company will hold its Annual Shareholders Meeting at 10.00am Wednesday 18 February 2026.

The location is Tote on Ascot, 100 Ascot Avenue, Remuera, Auckland.

You can also join the meeting online at this link.

Company Overview

Tower is a long-established insurance company, formerly a Government-owned entity, listed on the NZX in 1999. After several years of weather events contributing to poor results the company made a strong recovery to the extent is proposing a return of capital to shareholders.

The company has worked through a series of executive and Board changes over the last year. Graham Stuart retired from the Board in February 2025 after serving since 2013. In April 2025, the company announced Bain Capital, who held 19.9% of the shares, had disposed of its holding. In May 2025, Naomi Ballantyne was appointed to the Board. In June 2025, Paul Johnston, who had been Acting CEO following the resignation of Blair Turnbull, was appointed permanent CEO.

In July 2025, the company announced it was discontinuing multi-policy discounts. In December 2025, the High Court issued its decision in the FMA’s action regarding Tower’s misapplication of multi-policy discounts (MPDs) totalling approximately $11m, relating to around 61,000 customers. The Court imposed a penalty of $7m. This follows Tower’s self-reporting of the issue and its admissions of contraventions of the Financial Markets Conduct Act.

Current Strategy

The company outlines its strategy as “To be the best direct personal lines and SME insurer in our selected markets differentiated through digital and data, fair and transparent, and with customer care in everything we do.”

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. The Chair noted that regarding the Californian fires, only 25% of properties were insured.
2.  The company had streamlined its business by exiting Solomon Islands, Vanuatu, and NZ rural insurance.
3. Now that Tower is in the top 50 index, the Chair will support the board considering the inclusion of a “Future Director.”

The meeting report is available at this link.

Disclaimer

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  Generally good disclosure. We note there is a provision for “special exertion payments,” applicable for one-off situations – however, the company has never paid these.

Director Share Ownership:  Directors are not required to own shares.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The People Remuneration and Appointment Committee is responsible for the governance of the remuneration policy.

Incentives: The CEO is paid a short-term incentive (STI) in cash and a long-term incentive (LTI) by way of performance share rights.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the NZX Remuneration Reporting Template.

The STI is awarded at a target of 50% of base salary. The measures, weightings, and level of achievement against each component are well-disclosed, with the overall STI award being made at 71.6% of target.

Performance rights are awarded under the LTI at 50% of base salary. Vesting then occurs after a three-year performance assessment period. The measure is total shareholder returns (TSR) relative to the performance of companies within the NZX50 index. This method is favoured by NZSA.

The company discloses the gender pay gap but not the CEO/employee remuneration ratio.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

We note the Annual Report discloses the previous CEO was paid six months’ salary in lieu of notice. At the 2025 ASM in reply to a question from the NZSA proxy, the company noted that no onboarding payments were made to the new CEO. We would ask that full disclosure around the CEO’s termination conditions are made in each years Annual Report.

Director Independence:  All Directors are independent.

Board Composition:  Generally good disclosure, although we note there is no skills matrix to demonstrate how the individual Directors skill sets contribute to the governance of the company. We take a positive view of the functional skills and experience of the Board, and their direct relevance to Tower’s business.

The company does not participate in the IoD’s Future Director programme designed to develop and mentor the next generation of Directors. NZSA expect NZX50 companies to participate as part of a responsibility to develop and mentor the next generation of Directors.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

The Chair Michael Stiassny was appointed in 2013. The company has previously stated that he will not stand for re-election at the end of his current term.. NZSA appreciates the clear disclosure of succession plans. The other Directors were appointed between 2019 and 2025.

ASM Format: Tower Limited is running a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. 

There are comprehensive disclosures in the Annual Report and the Board Charter around the extent to which Board members can seek external or internal advice to support decision-making, and the extent to which internal assurance staff have unfettered access to the Board.

The company offers good disclosure of financial risks, business and operational risks, and the processes by which these are governed.

Unsurprisingly as an insurer, Tower’s Annual Report includes comprehensive details around strategic, operational, and environmental risks and their mitigations. We note that the company’s clear business focus on creating risk-based pricing for each of its insurance products.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  PwC was appointed Auditor in 2003, and the Lead Audit Partner was appointed in 2024. The company ensures the Lead Audit Partner is rotated at five years as required by the NZX Listing Rules.

Environmental Sustainability

Overall approach: Tower Limited has exceeded its FY25 climate target, achieving a 24% reduction in Scope 1 and 2 emissions from its FY20 baseline, surpassing its stated 21% goal. Its climate reporting is fully aligned with NZ CS 1–3, supported by comparative data and structured around the four-pillar framework. Tower continues to prioritise direct emissions reductions through operational decarbonisation, risk-based pricing, and digital transformation. Its investment in data capability and climate risk modelling (e.g. flood and sea surge exposure) reflects a maturing and solutions-oriented climate response.

Sustainability Governance: Climate oversight is embedded within the Board Risk Committee, and FY25 marked a further step forward in governance maturity. While Tower does not disclose a comprehensive Board skills matrix, it is actively strengthening ESG capability; for example, all directors completed climate-related training during the year. Climate accountability is formally assigned to management; however, no quantifiable metrics have been disclosed for sustainability-linked executive performance incentives.

Strategy and Impact:  Tower’s climate strategy is deeply integrated with its core insurance operations. The company has expanded its risk-based pricing approach to include new hazards such as sea surge and landslide, aligning customer premiums with climate exposure. The strategy reflects a focus on gross emissions reduction rather than offsets and includes a forward-looking transition plan to FY35. In FY25, Tower maintained its Green Star-certified headquarters and continued electrifying its fleet while enhancing its public climate engagement through research (e.g. “Weathering Change” report). The transition strategy demonstrates alignment between climate resilience, customer trust, and long-term value.

Risk and Opportunity: Tower reports on 22 consolidated climate-related risks, grouped by financial, operational, customer, and reputational themes. The scenario planning process was updated using external climate science and internal data. Physical risks (e.g. large events, flood exposure) and transition risks (e.g. reinsurance affordability) are documented, though disclosures on quantified financial exposure remain high-level. Opportunity disclosures such as customer retention and new product development, are present but would benefit from more explicit financial modelling to support investor evaluation.

Metrics and Targets: Tower provides clear emissions metrics (Scope 1 and 2) with five years of comparative data and intensity measures. Partial Scope 3 emissions are disclosed, and the company intends to extend coverage. In FY25, Tower also launched a GHG Management Framework and signalled a new FY26–FY35 target aligned with a 1.5°C pathway. Milestone achievement (exceeding the FY25 emissions target) is explicitly disclosed, supporting transparency and target credibility. Expansion of Scope 3 disclosures and assurance would further strengthen this area.

Assurance: Despite this Amber rating, Tower continues to make solid progress in this area. For the first time, Tower obtained limited external assurance (PwC) over its Scope 1 and 2 emissions. While this aligns with NZ CS2 requirements, broader assurance over risk disclosures, Scope 3 data, and performance statements is not yet in place. As the company matures its reporting, expanding assurance coverage would help ensure investor confidence and credibility of disclosed data.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations: The Annual Report discloses the details of two non-political donations. We note that the Board Charter discloses the Board are responsible for approving participation in any political lobbying and approving donations but it is not clear what the policy is as regards the company making donations to political parties.

Financial & Performance

Tower’s share price rose from $1.39 to $1.93 (as of 3^rd February 2026) over the last 12 months – a 39% rise. This compares favourably with the NZX 50 which rose 4% in the same period. The capitalisation of TWR is $661m placing it 43^rd out of 115 companies on the NZX by size and makes it a large company.

¹ per share figures based off actual shares at balance date (not weighted average)

² NPAT attributable to shareholders of the company

A proposal last year was for the company to cancel 1 share for every 10 held and return $1.1858 per share to shareholders. Shareholders voted positively on this proposal, and this completed during FY25. The result is a reduced number of shares on issue.

The company continued its good performance in 2025, with a rise in most metrics. Most impressively, Revenues were up 7% to $594m and the Insurance Service Result was up 27% to $105m.

After tax and other expenses, an increased NPAT of $83.7m was reported providing EPS of $0.244, up 25% on last year. The company also increased their dividend payment, up 158% to $0.245. Dividends are fully imputed.

Tower has a solid balance sheet with a current ratio of 2.33 and a debt equity ratio of 0.75. These ratios are stable compared to last year.

NTA per share rose to $0.75, and shares trade at an ever increasing 157% premium to NTA with the market happy with capital utilisation.

In conjunction with their annual results, the company provided shareholders with an investor presentation which also provided forward guidance and updates on strategic direction.

The company expects underlying NPAT to be in the range of $55m-$65m (assuming full utilisation of large events).

Tower shares are widely held, and ACC is the second largest individual shareholder with a 7.64% holding.

Resolutions

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Geraldine McBride was appointed to the Board 1 October 2022. She has extensive governance and technology industry experience, having performed Board and senior leadership roles both in New Zealand and internationally, with Sky Network Television Limited, SAP, Dell, IBM, National Australia Bank and Fisher & Paykel Healthcare. Geraldine is the founder and CEO of MyWave. Geraldine holds a Bachelor of Science from Victoria University and is a Chartered Member of the NZIOD.

We will vote undirected proxies IN FAVOUR of this resolution.

Naomi Ballantyne was appointed to the Board in May 2025 and is therefore required to offer herself for election. She has significant experience and expertise in the financial services sector, particularly in the New Zealand insurance industry. In 2023 she sold Partners Life Limited, the highly successful insurance company she founded in 2010. She is currently the Managing Director of KNK Consulting Limited, Chair of insurance distribution group TAP Group Limited, and a Director of Dai-ichi Life Asia Pacific Limited – the regional office of International Life Insurance Corporation. Prior to this she founded and was the Managing Director of Unique Solutions and Advice Limited and ING Life (NZ) (now Chubb) and served as Chief Operating Officer of Sovereign Limited (now AIA) for 12 years. Her previous directorships include Accuro Health Insurance, Newpark Financial Services Limited, Club Life Limited, and New Zealand Superannuation Services Limited. Naomi is a graduate of the London Business School and holds a Post Graduate Diploma in General Management from the University of Auckland.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 10.00am Monday 16 February 2026.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA