Biggest CEO pay, RACV tilt, Gunns

8. Biggest CEO pay packets of the season



By Stephen Mayne

After Friday's final avalanche of annual reports, we're starting to get a complete picture of the enormous CEO salaries that are now being paid. The following list only looks at the pay packets of CEOs whose companies have a June 30 balance, so we're not including the likes of Westfield's Frank Lowy ($13m) and Macquarie Bank's Allan Moss ($18.5m).

Similarly, this list only looks at actual payments in the 2004-05 financial year, so David Murray's $17 million golden goodbye from the CBA last month is not included and Fred Hilmer's $4.5 million "retirement benefit" is also excluded because it falls in 2005-06. However, Wal King's $23 million long term bonus, announced with his new contract in April, did make the grade:

So here it is, the top six CEO pay packets of 2004-05:

Wal King: Leighton Holdings, $35m

Rupert Murdoch: News Corp, $31m

Roger Corbett: Woolworths, $8.4m

Chip Goodyear: BHP Billiton, $6.4m

Michael Chaney: Wesfarmers, $6.12m

David Murray: CBA, $5.5m



25. RACV incumbents spend up against Mr and Mrs Crikey



By Stephen Mayne, candidate for the RACV board

The Age's daily gossip column has weighed in on the contested RACV election with this lead item today. And we keep hearing from a variety of sources that the RACV board are spitting chips about the non-disclosure of Mr and Mrs Crikey being married. However, this can also work against us as this email from member Sophie Capodanno demonstrates:

The RACV ballot has been really badly handled! I agree your married status should have been revealed, or at least the fact that you were running as a team. They told us the other two were current directors. I feel silly and embarrassed because I voted for you and incumbent Suzanna Sheed. As an ABC listener I am aware of your profile and thought your appointment would be a refreshing change for the old guard, but I would have voted for Paula as well if I had realised she was your wife and you were running as a team. Anyway I think the John Rawlins letter to the charity he chairs is a disgrace. How did he get away with that?

If you have a look back at recent RACV elections, it is clear that women incumbents do better than men, which is partly why I persuaded Paula to run. When John Rawlins was last up in 2002, he only got 16,280 votes compared with the other incumbent, Promina and David Jones director Paula Dwyer, who got 29,792.

The old guard are clearly worried that another well presented Paula, Mrs Crikey, will knock off Rawlins as the incumbents have pooled their resources and advertised in nine local papers, plus distributed flyers on windscreens across parts of Melbourne. However, it is their system which only allows a photo, professional qualifications, memberships and directorships to be disclosed to voters. Paula got a professional photographer in and paid $200 to make her "look like the AAMI woman". Check out the results here.

It is also interesting to see what material is included in the RACV's concise annual report that is sent to members inside the October RoyalAuto, which contains all the electoral information.

There is nothing on board fees, yet the full financial report, which we picked up from the $200 million RACV headquarters yesterday, reveals that the 15 non-executive directors were each paid between $50,000 and $59,000 last year. When you consider that 7 blokes on the board have served for 19 years or more, it has been a nice little earner over a long period for not having to do too much at all.

We picked up another 300 ballot papers yesterday so if you'd like to vote, email your address to smayne@crikey.com.au or just ring the RACV hotline on 1300 365 699 and ask them to send out another copy. Go on, there is a real chance one of us could get up here and it would give shareholder activism in Australia a huge boost. Why not send all your Victorian mates an email urging a vote for the Crikey reform team?



28. Gunns pull a swifty and declare no vacancy for Crikey



By Stephen Mayne, candidate for the Gunns board

The Gunns Ltd board, led by the unelected executive chairman John Gay, has pulled a swifty and declared there is no vacancy for Crikey at the forthcoming AGM in Launceston on October 27. Check out the notice of meeting here and you'll see what a rort this really is.

Even though the Gunns constitution allows for more than double the current number of five directors, the constitution also allows the board to declare that any number is the maximum. Whilst some companies such as Telstra and News Corp have adopted the appropriate line of allowing shareholders to decide if they'd like an extra director, the majority of the 19 public company boards I've run for since 2000 have adopted the same dodgy tactic as Gunns.

However, the old "no vacancy" trick has never been quite as brazen as this because Gunns already has the equal smallest board in the ASX 200 with Chris Corrigan's Patrick Corporation. How can the smallest major company board declare there is no vacancy? What sort of a closed shop are they running?

The effect of this rort is that a simple majority of 50% plus one will not suffice like in most normal elections. Instead, Crikey will have to knock off one of the incumbents, David McQuestin or Cornelius Van del kley, but that is very difficult when they usually get 99% of the vote in favour.

Add to that the average 6% of all voted shares which are donkeyed into the chairman's backpocket by lazy shareholders who just sign the form and send it back and you have an interesting mathematical equation. Let's see if it is statistically possible for Crikey to get elected based on the last few Gunns AGMs.

In 2004, former Tasmanian Liberal Premier Robin Gray was re-elected with 50.03 million proxies in favour and only 82,708 votes against. However, all 6.086 million open proxies were voted in favour, so the final yes vote after the poll went up to 58.667 million or 99.86%.

If Crikey had received 70 million votes in favour and no votes against, I still would not have been elected because executive chairman John Gay would have cast those 6.086 million open proxies against me. It would have been Gray's Saddamesque vote versus my 92% even though my yes vote would have been 40% higher. With no proxies against, I still wouldn't have been elected because of the rort that is undirected proxies given to the chairman.

Check out what happened when McQuestin and Van del kley last faced a Gunns board vote in 2002. Van del kley would have romped home with his 39.16 million proxies in favour and just 2,090 against. He didn't need the 1.763 million undirected proxies with the chairman to maintain Saddamesque support of 99.99%.

However, McQuestin's old Eddie Rouse ENT baggage is obviously remembered by some shareholders as 820,185 proxies went against him, dragging his primary vote down to a hardly miserable 97.73%, but his final vote rose to 97.94% after the open proxies went his way.

If I'd run in 2003 and received 50 million proxies in favour in and none against, I still would have lost if chairman John Gay had used the 1.763 million open proxies against me to drag a 100% primary vote down to 96.59%.

When you can receive 100% of proxies cast in favour and a substantially higher primary vote and still lose, you know the system is rotten and that is precisely what we have on display yet again with these disgraceful election rorts being used by Gunns. So much for the will of shareholders prevailing.

The next test will be whether Gunns actually provides a list of the top 200 beneficial owners for canvassing purposes. I wrote to the company secretary yesterday asking for precisely that yesterday, but I'm not holding my breath.

Copyright © 2022 The Mayne Report. All rights reserved

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