Battling with Westfield legend Frank Lowy in 1999

By Stephen Mayne
December 6, 2015

Taking on Westfield boss Frank Lowy in 1999 produced this account for www.jeffed.com.

AGM Season 1998 for The Daily Telegraph had a few hairy encounters but none were more dramatic than the run in with Australia's great shopping centre billionaire, Westfield Holdings executive chairman Frank Lowy. So yesterday it was time for another go and round two was equally enthralling.

First, some background. My interest in the Lowy family dates back to 1995 when they bought Fountaingate shopping centre in suburban Melbourne from the Transport Accident Commission, the monopoly compulsory third party insurer which is owned by the Victorian government.

The TAC was having a big fight with the Victorian Funds Management Corporation because it sold the shopping centre direct, rather than using the new centralised funds management business established by Treasurer Alan Stockdale when he backflipped on the much-loved TAC and decided not to sell it.

TAC managing director James MacKenzie made much of the need to rid the monopoly insurer of the development risk involved in expanding the shopping centre. He offloaded this risk to Westfield Holdings.

A quick look at the Westfield structure showed that Westfield Trust, in which the Lowy family owns virtually no units, owned most of the shopping centres while Westfield Holdings, which was then 45 per cent owned by the family, extracted healthy management from the existing centres and development fees for building new ones or extensions.

A quick comparison graph showed that while units in the Trust has increased about 30 per cent in the first half of the 90s, shares in Holdings had increased tenfold.

The obvious conclusion was that Holdings was getting too much of the upside. So I started running graphs in the Herald Sun and The Daily Telegraph every six months or so comparing the two share prices under headlines such as: "Stick with Frank, he's made $2 billion". It remains surprising that no-one else has ever picked up on this.

Eventually, the call came through from Westfield spin doctor Mark Ryan, a former spinner for John Cain and Paul Keating, offering a private briefing from one of the Lowy boys. Frank assumed this half hour audience would shut me up and it was the "double dipping" of asking questions at the AGM a few weeks later than really sent him over the edge.

He was the crankiest, most dictatorial and on occasions, most insulting, chairman encountered as part of The Daily Telegraph series. However, Telegraph editor Col Allan lost his nerve a bit on the series and rather than giving Frank both barrels for his behaviour, we treated him very gently under the headline: "Jousting with a business legend". At the end of the story I wrote that having seen Frank's performance, it was better to be with him than against him, so I bought another $3000 worth of Holdings shares which are today worth about $4000. Wise move that.
The amazing thing about Westfield then and now is that the same board presides over Holdings and Trust, even though the Lowy family and the executives running both have all their options and investments tied up in Holdings. In fact, more than 50 current Westfield executives are more than $1 million in front on their Holdings options or shares.

So who in Westfield is in their arguing for the interests of Westfield Trust. Both boards are dominated by Frank and his three sons, Steven, Peter and David. They are ably supported by a group of independent directors, some of whom are amongst our better respected businessmen and who also happen to be close friends of Frank and multi-millionaires in their own right.

Watching Frank deal with shareholders yesterday, there is more than a touch of the Jeff Kennetts about him. The old "frightened rabbits" syndrome around the board table is easy to imagine. Clearly, he rules Westfield with an iron fist.

Inspite of the fantastic performance of Westfield Holdings over the years, the unsustainability and inappropriateness of the board structures became all too apparent during yesterday's 39th and longest AGM. More on that later.

The day began with an early morning call to someone connected with Lend Lease - a Westfield competitor which owns 19 shopping centres in Australia - to chat about some of the issues surrounding Westfield.

His most interesting comment was that Lend Lease had been forced to increasingly share some of the development risks and profits with the funds that own the shopping centres.

It struck me straight away that the same does not happen at Westfield because of the board structure. The reality is that the Westfields should become one company - just as Kerry Packer and Tabcorp have brought the ownership and management contracts of Crown Casino and Star City casino together to remove any conflict - or they should have independent boards.

For some reason beyond my comprehension, listed trusts are not required to have annual meetings. Therefore, Westfield Trust's 37,000 unitholders, who have invested about $4 billion, do not get an annual opportunity to quiz the board about the fees being paid to Westfield Holdings. How long can Canberra let this ridiculous scrutiny-denying anomaly last.

However, Westfield Trust did hold a meeting three months back to increase the fees paid to Holdings and it almost got voted down by institutions. Cranky Franky attacked the Australian Shareholders Association for using the word "siphoning" to describe the fees. A couple of Westfield stooges got up to speak in favour of the motion and explain how the management fees are so much lower than Gandel, GPT and other Westfield competitors. Yes, but what about the huge development fees, stooges?

So there's the background, now let's get onto yesterday's fascinating meeting which, by Westfield standards, was a marathon 90 minute affair.

Frank shifted to a bigger venue at the Wentworth and the place was a sea of red, complete with numerous Westfield women in their nice red outfits. His chairman's address was justifiably upbeat.

"Profit after tax for the year was up 23% to $126.5 million - the 39th consecutive profit increase since we listed in 1960," he said.

And what about these amazing stats on Westfield's growth during the 1990s?

"In 1990 we had $3 billion of assets under management, today that figure is at $17 billion. Then we managed 21 centres, today it is 81 centres. In 1990 there were 3,500 retailers, today there are 12,200. In 1990 retail sales generated in our centres were $3 billion, today it's in excess of $21 billion."

That's a pretty spectacular comeback from the disaster the Lowys made of Channel Ten after buying it off Rupert Murdoch's News Corp for $800 million and then watching it sink into receivership.

Not wanting to be accused of missing the internet boat, Frank reassured shareholders the company's as yet unknown internet strategy would generate "important new revenue streams" for retailers.

With typical understatment, Frank closed off by saying: "I am confident that this time next year I will be able to report to you on another strong result, with increased profits, for your company."

Remember that if you'd invested $1000 in Westfield Holdings in 1960 it would now be worth more than $100 million, so we'll all yawn next year when Frank delivers yet another 20 per cent profit rise.

Now it was time for questions from the floor. The first shareholder on his feet was understandably complimentary but wanted to know about $636,920 in related party transaction payments to the Lowy family. Frank explained this was things like usage of family-owned properties in New York.

Then I asked an innocuous question about the group's internet strategy. Frank did not come up with much in the way of detail except to say the overall retail market would rise and Westfield was not rushing into it.

I followed up with one that alluded to the value of Westfield Holdings' management and development contracts. Why did it have net assets in the books of $491 million and a market capitalisation of $5 billion. There seems to be $4.5 billion missing on the balance sheet and it can't be a takeover premium because the Lowys have unfettered control. Frank made reference to some note in the accounts which I couldn't find and then basically said people could make up their own mind. That's helpful.

Then the chap sitting in front of me, Mr Wilson, stood up for the first of what would turn out to be several important contributions to the meeting. Now Mr Wilson was no stooge of mine and even disappeared after the meeting before I had a chance to say hello.

His first question related to why all the non-executive directors got a surprisingly large $70,000 superannuation contribution which lifted their annual payments to between $130,000 and $180,000 in the case of Fairfax chief executive Fred Hilmer. This is exceedingly high by Australian standards.

Rather than explain the specifics of the superannuation decision, Frank said it was "a matter of judgment" and that they all made "enormous contributions" which gave Westfield a "window on the world".

With deliberate understatement he observed that "so far we have not done too badly" which later after further questioning became a rather shrill claim of performance that was "unequalled in Australia in the last 30 or 40 years".

Mr Wilson returned to his feet asking "is that the best you can do" and then restating that the superannuation payment was "a bit extravagant". Frank responded that "they are entitled to this reward and more" and even suggested he'd be happy to pay "ten times as much". So would I as long as those beautiful development contracts with Westfield Trust keep underpinning Holdings' sensational performance.

Mr Wilson's next question really cut to the chase. Why did executive chairman Frank Lowy get paid $7.7 million last year, more than any other Australian executive. Frank began with his own defence pointing out that he does not get any executive options like other executives. Instead he has "a profit share that is my incentive" and his "base ($898,638) is quite small in relative terms".

Deputy chairman Fred Hilmer - yes, that's right, the man running Australia's most important and influential newspaper group John Fairfax - then chimed in with a defence of Frank in which he referred to "unparallelled performance" and the need to "look at the mix of the package".

It did seem funny having Fred defend Australia's biggest package when Fairfax's Australian Financial Review had last week criticised a 22 per cent explosion in pay to Australia's top CEOs this year. Afterall, why is it that a company ranked about 30 in Australia has the highest paid local executive?

At this point it was time to back Mr Wilson up. Jeffed.com asked why it was necessary to pay the executive chairman six per cent of net profit and 11 per cent of the total dividends. This was the highest profit-share arrangement arangement of any major company in Australia, yet Frank is already Australia's second richest man holding Westfield shares worth about $1.5 billion.

I cited the examples of PBL executive chairman James Packer and former Coles Myer executive chairman Solomon Lew who both declined to draw a salary because so much of their wealth was tied up in the company. Joining Frank in his corner is the richest Australian-born man Rupert Murdoch who collected about $12 million in salary last year despite holding shares worth about $9 billion. I guess everyone has to make ends meet.

In response, Frank tried to argue that it is irrelevant whether he owns shares in the company, which I would have thought is sort of hard to ignore. Loyal Fred then pointed out that Frank's contract was "a long term arrangement and we believe it has been enormously beneficial for the company".

This seemed to suggest Frank somehow needs to be highly incentivated, as John Howard once put it. Surely owning 30 per cent of a $5 billion company is incentive enough for Frank without the "independent" directors agreeing to hand over six per cent of net profit on top. Fred said the contract was initially for five years but it is now reviewed from year to year. Maybe next year the independents should impose a bit of restraint on Frank so that a greater proportion of the profit can be distributed to non-Lowy shareholders.

The next issue was the one suggested by my Lend Lease man. Could the owners of "the funds", ie Westfield Trust and Westfield America Trust, put pressure on us, Westfield Holdings, to share in some of those juicy development profits. This was asked knowing full well that the board which controls "the funds" was also "us".

Frank knew it went right to the heart of Westfield Holdings future profit growth: "You are questioning the basis of the company, how it does business and how it makes money. We are not about to change a successful formula."

A quick peek at the accounts shows that Westfield Holdings generated $647 million in 1998-99 from development contracts it struck with "the funds". These generated a record $86.6 million pre-tax profit paid for by Trust's 37,000 unitholders. If "the funds" had been allowed to share in half of this development risk and reward, Holdings's profits would have been $43.2 million lower.

You and your board won't change the "successful formula" Frank, but what about the people who have put up $4 billion for Westfield Trust. Will they ever require some board changes to the Trust? Not as long as our big institutions continue to act like donkeys. To think, these institutional fund managers supposedly represent million of Australians who have entrusted their superannuation savings with them. Yet they lie doggo and allow this blatant conflict of interest to go on for years. A conflict of interest is still a conflict of interest not matter how well a company is performing.

Virginia Milson, a shareholder activist opposed to Boral and Amcor's wood chipping and Westfield's development at Bondi Junction, was next to get up but was given relatively short shrift by Frank despite his opening heartfelt remark that "we like to hear from you".

We got a little history lesson from Frank about the battles in the 1960s to build the first Westfield in the Sydney suburb of Burwood - nothing to do with Jeff's seat - and how the people out there were "waiting with baited breath" for the new centre now being developed.

Frank seemed pretty determined about Bondi Junction, stating ominously that "we will get approval" and that "whatever we do, we persist".

He might be our second richest man and a brilliant businessman, but Frank's vocabulary is clearly not his strong point. Virginia used the world alacrity in one question, to which Frank responded: "Alacrity, I don't understand, sorry."

Here is one hypothetical context for the word: "Offered a six per cent profit share by the independent directors, Frank signed it with great alacrity."

We then moved along to the re-election of directors and my old boss Fred Hilmer was first cab off the ranks. I agreed with shareholders who spoke against Fred's directorship at last year's Westfield meeting believing the vital position he held as head of Australia's most influential newspaper group should preclude him from holding positions with companies that could be newsworthy. Westfield is certainly one of those. It is constantly battling councils and communities over planning matters and has had a couple of big stoushes with the tax office.

I also wrote several strongly critical things about Fred for the Daily Telegraph and asked some awkward questions at last year's Fairfax AGM. Much to my surprise, Fairfax's Australian Financial Review then offered me a job this year as their Rear Window gossip columnist which said good things about editorial independence.

After two months I resigned to stand in Burwood against Jeff after publisher/editor in chief Michael Gill decided sight unseen that I should not write a big story on Jeff. He refused my request for leave without pay but when ruled ineligible to run three days later, I tried to get my job back knowing that the editor, Colleen Ryan, and Gill, had both said I was doing a good job. Colleen even said hiring me was "one of the things she was most proud of" but Gill vetoed the return after talking to Fred.

It remains my belief today that if Fairfax was worried about its editorial content only, I would have been reinstated after making a grovelling apology for potentially embarrassing the paper. Even Frank Lowy said last month he was "missing me" in Rear Window where no permanent replacement has been found.

So that is the context of the next question about Fred's position on the board. I professed to be wearing two hats as journalist and shareholder and argued he should not be there because of the importance of his independence in leading the most influential newspaper group in the country. I'd spent seven years watching the greatest threat to independent journalism, Jeff Kennett, attack and eventually tame Fairfax's Melbourne paper, The Age, mainly through various board and business connections.

Clearly, Fairfax papers will never explore the many issues around the Lowy's and Westfield properly while Fred is on the board. After all, he's the deputy chairman and chief defender of what many would argue are unnecessary excesses.

The example of Fred's former chairmanship at Pacific Power exemplifies the point. For some reason, presumably self-censorship, Fairfax papers have failed to mention that Fred was chairman of Pacific Power when the electricity trading leading to a $600 million court battle occurred. How can this be left out when clearly the management and board of Pacific Power have a lot to answer for over the lack of control measures on electricity traders at the time.

Whilst doing Rear Window I also censored myself and did not report what Frank told me about who was on his boat off St Tropez in the Mediterannean in July. The Sydney Morning Herald reported that former Bankers Trust Australia chief executive and independent Westfield director Rob Freguson was with Frank. When I asked who else, Frank said: "Just some good friends." Pressed again he said: "I can tell you but you won't write it, Fred Hilmer."

My interpretation of this was that Frank thought I would be too scared to print it, although maybe he meant to say it was "off the record". I then called Bruce Wolpe, the Fairfax spin doctor who was at the Westfield AGM watching the action yesterday, and he said to judge it on its editorial merits and that Fred was open to everything. Despite this positive signal, I declined in the end for fear of Frank picking up the phone to Fred and complaining.

Self-censorship is a much bigger problem than direct censorship although the blurring of editorial and commercial lines by Fairfax means that Michael Gill is deciding on what stories to run and which journalists to hire whilst also jockeying to be the next Fairfax chief executive. This throws up inevitable conflicts and no less than Lachlan Murdoch was publicly attacking the blurring of the lines this week saying News Ltd would never do it.

After Fred had made a spirited defence of Frank earlier, Frank returned the favour on this issue. "You can count on Fred's independence," Frank said.

It was probably the Westfield clique on the Fairfax board that recommended Fred as the cross-directorships don't stop there. Former Coca-Cola Amatil CEO Dean Wills is on both boards, as is Packer mate David Gonski.

Frank told shareholders about his response to Fred's appointment at Fairfax: "My first question was 'please Fred, will you stay with us'?" His second was probably: "And do you want to join us on the boat off St Tropez next year where the independent directors are meeting to approve a few more construction contracts with Trust." Sorry, I jest too much. That's probably a low blow.

When Fred committed to Fairfax, he quit every other board seat he had and should have quit Westfield too. Every public figure would want to be associated with Fred and for all Fairfax journalists to know this. Fred's a Godsend for Frank because if anyone is going to run the "Trust versus Holdings" conflict of interest story it is the Fairfax press.

If I was close mates with Fred, people like Glenn Burge and Michael Gill on the AFR would not push to have me banned from being mentioned in the paper, regardless of the editorial merit of what happened in the Victorian election and at various AGMs.

Frank did not give Fred an opportunity to defend himself but instead just turned it around on me, suggesting "maybe your independence is in question". A good answer would have been that Rupert Murdoch sits on the Phillip Morris board, so you rarely see hard-hitting attacks on the world's biggest tobacco in the Murdoch press. And the response to that response would be that two wrongs don't make a right.

As things turned out, Frank got his conflict of interest attack on me totally confused, suggesting I was trying to further my newspaper career. How attacking the Fairfax CEO furthers my newspaper career is beyond me. Clearly, he had not caught up with the fact I was no long working for a newspaper. All I'm doing journalistically is working three days a fortnight for The Eye magazine writing the Bitch column. So far, I have not written anything for The Eye on AGMs as it is all for this website.

A more appropriate counter-attack would have been that I had an axe to grind with Fred over the circumstances of my departure from the AFR. To that I would say that I have been a consistent critic of Fred's since the day he was appointed by the Packer and Lowy-friendly Fairfax boards as CEO last year. Why, you ask? Because the Telegraph editor egged me on, Fred knew nothing about newspapers, he was known to be highly critical of journalists, insisted on their being no hurdles on his Fairfax options, has squeezed editorial budgets too much, supported the blurring of editorial and commercial lines, went to the Packer wedding, remained on the Westfield board and, finally, was party to the blocking of my reinstatment to the AFR, contrary to the wishes of the editor.

Frank was happy to declare that Fred was "unanimously" re-elected to the board - I abstained - and after that Peter Lowy and Dean Wills were re-elected without comment.

The next item on the agenda was the issuance of options to four executive directors other than the executive chairman - the same options which Frank cited as the reason why he is paid so much.

The first proposal was for long-serving finance director Stephen Johns to be issued another 500,000 options even though he's about $30 million in front on his existing 3.76 million shares in Westfield Holdings. This was to be followed by the three Lowy boys who were each to be issued 1.25 million options at $9.31 - a five per cent premium to the market price at the time but a 40c discount on the day of the meeting.

Undaunted, brave Mr Wilson leapt to his feet and quite correctly pointed out that "the number of these is excessive". He compared it with Brambles where the CEO is only issued 200,000 options. And this total of 4.25 million options with a face value of $39.5 million when exercised were earmarked for the four executives below the chief executive.

As Mr Wilson spoke there was a typical exchange with autocratic Frank. "You can if I let you," he barked as Mr Wilson tried to finish his question. "I have been very lenient with you and others...please make your point and don't make any arguments."

The point was as follows: Westfield had "created the wrong impression by going right over the top" on the options. "They (the lucky four) don't need options of this amount to perform...I can't understand how they (the non-exec directors) agreed to bring this proposal."

Frank was typically blunt in his response saying Mr Wilson was "a little bit confused".

"You don't live in the real world. We are competing with executives all over the world. We are not about to lose them. This was one of our best decisions."

At this point it was time to call on those thoroughly independent directors again. "I think maybe Dean will help me out a little here," he said, motioning towards that very affable and helpful independent Dean Wills.

This was Dean's lecture. Look at "the total package," he advised. "The whole objective of issuing options is to concentrate people's minds." Globality was again enlisted as a defence: "We are a global company...it is a global market. We have to compete in the retention of effective executives in a global scene."

And finally: "I do not consider them to be excessive in any way" followed by a repeat of the "quite unique and quite remarkable" Westfield Holdings performance.

Well done Dean, now it's Fred's turn who opened by "reaffirming the difference between shares and options".

He said the Brambles comparison was "misleading" and that "it is not healthy if these kinds of comparisons are bandied around"

This is because Brambles shares are trading at about $40, so Ken Fletcher's 200,000 options are over about $8 million worth of stock. Yes, Fred, but he is the CEO. Here, we are discussing the issue of $40 million worth of options to four people under the CEO in a company that is about half the size of Brambles. It was a thoroughly appropriate comparison and not "misleading" at all Fred.

Fred's next offering was that "we have a number of CEOs of major divisions who are competing globally."

This is a good point to explore. Is Westfield Holdings paying all the salaries. I can recall an article in BRW back in 1995 in which it was pointed out that the privatisation of Westfield's listed American vehicle by the Lowy family about 10 years ago represented a $600 million opportunity cost for Westfield Holdings given the subsequent surge in their value.

Given that Westfield Holdings is paying for the use of privately owned Lowy facilities in New York, is the Lowy family paying themselves for the time they spend on their private interests or is Westfield Holdings, now 70 per cent owned by the public, the only vehicle paying them?

And does anyone seriously think the Lowy boys are going to be poached by a competitor when their $1.5 billion inheritance is invested in Westfield Holdings. It's like saying Lachlan Murdoch could be poached by PBL. The global market on executive salaries does not apply to the Lowy boys as long as the family has a controlling shareholding. It's a different story for finance director Stephen Johns.

After Fred's response, Mr Wilson quite rightly stood up and chastised Fred and Dean for lecturing him about what options were and why who have them. He was simply asking the questions as to whether this new issue was excessive.

I had not originally planned to enter the debate over the options because the strike price of $9.31 is pretty high and was pitched at a five per cent premium to the prevailing market price, so there was a slight performance hurdle in there.

However, Fred's line suggesting it was normal when no other company I've seen in Australia has issued so many options to non-CEO board members at the same time. Also, a quick look at the annual report revealed a number of discrepancies. The resolution was for the separate issue of options to the three Lowy boys, but the annual report only listed the total holdings of the Lowy family. And why was this listed as 164.4 million shares on page 68 and 184.5 million shares on page 58. Do the Lowy's own $1.6 billion worth of shares or $1.8 billion?

Frank's cryptic response to the discrepancy was that it complied with the law and related to timing matters. So have the Lowy's bought another $200 million worth of shares recently or sold them? Have they just taken up a stack of options? It would have been nice to be told, Frank.

Frank declined to itemise how many shares each of his boys owned individually so we could see what sort of an increment to the package shareholders were approving. At least with Stephen Johns we knew he already owned about $35 million worth of stock and was being issued options over another $5 million worth. With the boys, we just don't know.

My last offering on this issue went to the broader issue of cross-directorships, precedents on executive pay and the so-called global market.

How could Dean Wills stand up to this options package around the Westfield board table when he pocketed $18 million from a share incentive package when he retired as an executive at Coca-Cola Amatil. And how could Fred Hilmer sit there and insist on bigger hurdles in the Lowy options when he insisted his own multi-million dollar options package negotiated with Fairfax, and approved by fellow Westfield directors Dean Wills and David Gonski, have no performance hurdles whatsoever. The board room circuit is a sadly small scene in Australia such that people supposedly sitting in judgment of others often carry lots of baggage themselves.

And if the American market was so different, why wasn't the Lowy boy running the American operations getting a bigger slab of options.

At this point, Frank got back onto my so-called conflict of interest. "You are here writing a story for your paper," he said. Wrong, I'm doing it for this website, Frank. He then gave a passionate explanation of the long hours his boys work making phone calls to Europe at 6am in the morning and then America at 11pm at night.

After this final spray, shareholders approved a change in auditor to Ernst and Young, Kerry Packer's favourite accounting firm, without seeking any explanation as to this change to the winning Westfield formula.

After the meeting, a big hand landed on my shoulder and it was the avuncular Dean Wills pointing out that he pocketed $19 million from Coca-Cola Amatil not $18 million as I suggested. Apologies for this error, Dean.

Frank then came up and I politely told him he'd been generous with his time. He was clearly happy with his comments about my apparent conflicts of interests.

"With conflict of interest, it's how you handle it son," he said pointing at me with a big smile. "And you can quote me on that."

All in all it was a pretty good meeting. Frank was typically autocratic but that is what you get with Westfield. He runs the show and if you don't like it, get out. As he said in conclusion: "We do the way we do it, we are good at it." Too right.

For anyone who got to the bottom of this and then read today's papers, you would think you were at a different meeting.

The Australian and the SMH virtually ignored the whole executive pay debate which is unprecedented for Westfield. Robert Harley from the Fin Review gave a good account of the meeting, but not surprisinlgy, the Fairfax press did not report the debate about Fred's continuing position on the board or that he was the chief defender of Australia's biggest pay and options packages.

For some reason, the two main business gossip columnists in Sydney, Kate Askew from the SMH and Michael West from The Australian, went to the boring Simsmetal AGM instead of Westfield and therefore none of the gossip columns carried any of the mountain of color from the meeting.

The last word comes down to Frank's pet subject of conflict of interest. In my view, there is no bigger conflict in corporate Australia at the moment than the fact that Westfield Holdings has management and board control over Westfield Trust and has entered into dozens of contracts with the trust which have helped propel Holdings's share price 2000 per cent higher this decade while units in Trust have only doubled over the same period.

The Lowy's argue that they take all the construction and development risk but, if they can show me an investment as risky as this, I'll sell my house and stick all my money into it.

Australia's institutions are to be condemned for not changing this situation. However, it does make it difficult when Rob Ferguson, the former managing director of our second biggest institution. BT Australia, is a party to this ongoing conflict. And Rob is hardly one to limit executive pay at Westfield when he collected more than $20 million from the BT sale to US fund manager Principal. Let's hope Principal can live up to its name because this situation would never have lasted in American where institutions are far more vigilant and active.

Finally, it should be stated that Westfield is one of the truly great Australian success stories, my only beef is with the way the fruits of that success have been shared. There are a stack of Aussie companies that have failed in the tough American market but Westfield is going from strength to strength there.

We need more national champions and Westfield is now the second or third biggest shopping centre manager in the world and still growing rapidly. Coming from a nation of corporate underachievers - compare our business success with sport - this unmitigated success should be hailed in all quarters.

With Frank turning 70 next year and Westfield turning 40, it would make a good time for him to step back from the chief executive post and make way for his sons. And maybe as part of this generational transition it is also time to bring together all of the Westfield arms under one ownership structure.

And we'll see you at next year's AGM or, hopefully, an earlier EGM to approve the bringing together of all the Westfields.