February 2, 2010
Dear Mayne Reporters,
After getting home from The Walkleys at 3.45am, it was a struggle to make it to Jeff's Shed by 10am this morning for the Centro Properties Group AGM.
However, given the remarkable events outlined in yesterday's edition, I dragged the wife, barrister and RACV director Paula Piccinini along to observe proceedings and meet some of the directors after the AGM. Who knows, they could soon be board colleagues.
Chairman Paul Cooper confirmed that as manager and major shareholder, Centro voted about 1.1 billion Centro Retail shares against me at yesterday's AGM. Check out the ASX announcement for yourself, because this revelation means the independent non-Centro shareholders voted as follows:
For: 435 million
Against: 180 million
That's a thumping 71% endorsement which is quite a mandate as head hunters Egon Zender continue the process of sourcing new directors for both Centro Retail and Centro Properties Group, assuming the banking syndicates agree to roll over the debt by the December 15 deadline.
With a directorship on Centro Retail now in serious prospect, the decision was taken to make a constructive contribution at the Centro Properties Group AGM today which was notable for its calm debate and sensible questions from about a dozen different shareholders over the course of two hours.
Whilst a couple of shareholders asked later if I worked for a Centro PR firm, this was a little unfair. For instance, chairman Paul Cooper wouldn't have enjoyed answering my question about his pay, which has leapt to $345,000 a year since he assumed the chair on July 1.
Martin Hyde from plaintiff law firm Maurice Blackburn repeated his effort from yesterday in putting questions to the auditor as part of the class action IMF is funding against Centro.
To demonstrate the point made in yesterday's campaign speech, I gave Martin a solid blast today with plenty of colourful language about ambulance chasing lawyers loitering around the Centro carcass looking for a quick pay day. There was strong applause, as no-one likes class action lawyers.
Maurice Blackburn and Slater & Gordon have been involved in an unedifying squabble to sign up Centro shareholders and the judge has suggested they somehow try and combine the cases, which won't be easy given the personalities involved.
Sam Kavourakis and Peter Wilkinson were both up for election today and I spoke in favour, despite making the obvious point that ordinarily you would want them voted down for contributing to the $5 billion-plus destruction of value at the two listed Centro vehicles they have served.
Both have tendered their resignations but Paul Cooper has asked them to stay to provide stability as the banks decide whether to roll Centro's debts. Fair enough.
That said, it was unfortunate that both were returned with 95% in favour, so I told the meeting neither should interpret that to mean 95% satisfaction with their dreadful records. The turnout was a tiny 16% of the register, which suggests most institutions have bailed from Centro Properties Group and the ownership is spread across retail investors.
The much bigger turnout of independent shareholders at Centro Retail yesterday - 615 million of the 1.2 billion non-Centro shares were voted on my nomination - suggests that this is where more of the institutions remain chasing residual value.
And that is why Centro Retail needs to have more directors who are independent of the manager, but can work constructively with the other directors.
I'll be meeting with Egon Zender in the coming days but with 71% of the neutral shareholders voting in favour yesterday, there is a very strong argument that the wishes of minority shareholders should be accommodated, provided I undertake to work constructively and observe normal board protocols.
BHP Billiton and the $11 billion man
The BHP Billiton tilt yesterday was always going to throw up record dollar figures for voting over the course of 31 board contests given the sheer size of the company.
Whilst the board tilts are about applying serious pressure on serious governance issues, this line usually goes down well on the talk circuit: "Who else can claim they've had more than $200 billion worth of stock voted against them?"
Whilst that figure was almost down to $100 billion courtesy of the crashing market, the BHP Billiton tilt has transformed the numbers, especially after shares in The Big Australian today soared another $1.91 to $30.71.
BHP Billiton released the final results from the two polls conducted at the London and Melbourne AGMs at 8.30am this morning and the numbers on my candidacy finished as follows:
For: 365.6 million (12.38%)
Against: 2.588 billion (87.62%
Hmmm, that's $11.23 billion worth of shares in favour and a whopping $79.5 billion against.
The situation flashed up on the screen at the London AGM on October 23 was as follows:
For: 252.7 (17.3%)
Against: 1.208 billion (82.7%)
This suggests the Australian vote was as follows:
For: 112.9 million (7.56%)
Against: 1.38 billion (92.4%)
Given the platform involved opposing the takeover bid for London-based Rio and opposing Melbourne-based chairman Don Argus, the tilt was always going to be better supported by the PLC shareholders, who are probably not so familiar with outside board candidates.
However, given that corporate elections are not secret ballots and BHP is able to tap into the Computershare systems and observe who and how shareholders are voting in real time, it would not surprise if they did the ring around of potential donkey voters to politely inquire if they really meant to vote for me.
It would be fascinating to know how many proxy votes in favour were later revoked but no doubt BHP and Computershare will decline to share equal information with all candidates.
Mea Culpa from Barbara Ward at Qantas AGM
At last, we've finally had a decent mea culpa at a major public company AGM from a director who blew up billions elsewhere.
RiskMetrics recommended against Barbara Ward's re-election to the Qantas board today based on her record as one of the independent directors on the Allco Finance Group board who approved the disastrous Rubicon related party deal last December.
Whilst obviously not in Brisbane for the Qantas AGM, observers of the webcast reckon she delivered quite an explanation.
Shareholder still lodged a big protest vote of more than 40%, although Qantas still hasn't released the final figures to the ASX, but you can find them here later.
Outgoing CEO Geoff Dixon is the highest paid airline boss in the world, which explains the big protest vote against the remuneration report.
Qantas gets more hen-pecked by unions at its AGMs than any other company, but it shouldn't complain when Dixon walked away with a ridiculous $12 million in 2007-08.
The Dixon term at Qantas is now officially over. All up, you'd have to say he did a pretty good job, but copping a 40%-plus protest against his final remuneration report suggests that shareholders don't believe he was worth all that loot.
Fingers crossed for Manningham Council election
That's all for now. We'll be back with another edition on Monday and I'm quietly confident there'll be some good news from the Manningham Council elections. The polls close at 6pm and you can check out the platform and related information here.
Do ya best, Stephen Mayne
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