February 9, 2010
Dear Readers,
a pinch and a punch for the first day of the month - as the kids have been saying on the first day back at school.
And a belated email edition of The Mayne Report, too. It's our first since the January 6 missive which was dispatched from the wonderful RACV Royal Pines resort on the Gold Coast whilst the rest of the family were off enjoying Dreamworld and White Water World, an asset which has only recently escaped the clutches of those gouging Macquarie Leisure management fees.
That's a four week gap between editions and in 2010 we're looking at producing bumper monthly editions with the occasional extra. The coverage will focus on corporate governance, shareholder activism, local government and some politics, given there will be Victorian and federal elections this year.
We've added a few Victorian councillors to our 7000-strong the email list in the hope they'll be interested in our local government coverage but in light of ComSec being fined $55,000 for spamming today, just click here if you don't wish to receive these very occasional emails.
And speaking of councillors, we're cranked up this new list tracking "councillors in parliament". There are already 79 entries but I suspect it will finish up closer to 200 given we'll take it all the way back to 1970 and it's a well worn path. Send your entries to Stephen@maynereport.com.
Whilst on the road in NSW it was amusing to see The Daily Telegraph pull out that predictable splash on January 13 about overpaid councillors allegedly hooking into excessive expense claims. "More perks than pay", screamed the page one headline, following by the following two paragraphs on page one:
Greedy councillors are dipping in to the public purse, in some cases spending more on expenses than they earn in wages. While the public forks out for ever-increasing rates, councillors are spending on everything from overseas trips to phones, childcare and souvenirs, a Daily Telegraph investigation revealed.
Cripes, councillors in NSW aren't even allowed to make phone calls, it seems.
I should have reworked the following letter which was sent to the Herald Sun last year, but somehow didn't make it onto the letters page:
From: Stephen [mailto:stephen@maynereport.com]
Sent: Tuesday, 29 September 2009 1:16 PM
To: 'hsletters@heraldsun.com.au'
Subject: response to attack on council CEOs
“It's nice for some” screamed the Herald Sun's front page on Tuesday in what was a very unfair attack on council CEO pay packets.
I've only been a councillor at Manningham since last November and my experience is that our executive team are highly competent and modestly paid as they steer a complex organisation that delivers 100-plus services with more than $1 billion in assets, 650 staff and annual revenues approaching $100 million.
Besides, all 79 council CEOs in Victoria were collectively paid less than the $US20.8 million Rupert Murdoch, executive chairman and largest shareholder in the company which publishes the Herald Sun, received in 2008-09. Talk about people in glass houses. And don't forget that council CEOs have the very tough job of dealing with us councillors.
Stephen Mayne
City of Manninghan councillor
Templestowe
Why BHP-Billiton chairman Don Argus shouldn't have got Australia's highest honor
There is rarely critical analysis of the annual gongs dished out on Australia Day and the Queen's Birthday, although this effort in Crikey a few years back listing questionable AC awards to business figures was a rare example.
We also decided to provide an unusual critique in the regular chat with Lindy Burns on 774 ABC Melbourne last Wednesday from the Australian Open whilst Roger Federer was being carved up by Nikolay Davydenko in the first set of his quarter final.
The gong to Toll Holdings CEO Paul Little was questioned given the company's outrageous pay practices at the time of the Asciano demerger and we pointed out that Mark Johnson's citation should have referred to him being a co-founder of Macquarie Group. Similarly, James Fairfax should have been praised for his business acumen in selling out to his brother at about $4 a share before the GFC struck.
However, the main criticism was levelled at BHP-Billiton's chairman Don Argus, who was upgraded from an AO to an AC.
After 10 years dominating proceedings at BHP-Billiton, last Friday afternoon Argus came up with two final board appointments before he departs the scene in a few weeks.
And the so-called patriotic national champion advocate has even managed to finally back a couple of Australians in former North and Orica CEO Malcolm Broomhead and Carolyn Hewson, the former wife of the rather tattered John Hewson.
We've done a comprehensive 1800-word piece on the Argus record and BHP's rather unAustralian board structure for the Fairfax websites today and a few emails have been coming in given the strong views proferred on a range of issues. Take the time to check it out if you get a chance as there's a fair bit of meat in there.
A deluge of political donations figures finds Aunty asleep at the wheel
The annual deluge of political donations data landed at 9am this morning so check out this story in today's Crikey after a quick review of the figures. There will hopefully be plenty of coverage throughout the media over the week as this issue tends to get under-reported every year.
Amazingly, the ABC decided this was a non-story on The World Today, PM, the 7pm TV news and The 7.30 Report. It may be complex and involve a fair bit of number crunching but campaign finance disclosure is at the heart of any democracy. It is only a story one day each year under a ridiculous disclosure laws but the national broadcaster can't even give it the exposure it deserves. Sad indeed.
Campaign finance reform has been a passion of mine for the best part of a decade. Indeed, the following motion is on the agenda for tomorrow night's Manningham City Council meeting. Specifically, have a look at item 14.4 which reads as follows:
14.4 Notice of Motion by Councillor Mayne (NOM No. 4/2010)
I hereby give Notice of Motion for the February 2, 2010 Council Meeting as follows:
MOTION
“That in the interests of transparency and good use of technology, Manningham City Council resolves to publish on its website the campaign donations returns lodged by Councillors elected at the 2008 election and in all future elections until resolved otherwise.”
This will hopefully get approved with the minimum of fuss given that all the returns are public documents already and the motion just improves the visibility.
Finally, here are a few links to past coverage of campaign finance issues in Crikey, showing what a rich vein of material it can throw up:
Assessing the figures and coverage from 2006-07
Labor and its colourful Chinese benefactors
Did Dick Pratt's donations influence Costello's cartel laws backflip?
Stars align for campaign finance reform
NSW mafia stains Labor and Liberal alike
John Durie's unfair attack on Bob Browning
John Durie had an interesting column about excessive CEO payouts in The Australian on January 19, but on the way through he unfairly maligned former Alinta CEO Bob Browning claiming that some investors had "lost the lot" if they accepted Babcock & Brown paper in the $13 billion 2007 takeover shoot out with Macquarie.
I knocked up this Crikey story pointing out the facts - most importantly that shareholders received more than $9 a share in cash from the Singapore Government - hoping that John would see the light and correct the record.
Alas, it wasn't to be so readers of The Australian might still believe that investors who paid only $2.25 a share to the WA Government in the 2000 Alinta float have done badly, when truth be known they made a 500% plus return. That's hardly a case of losing everything.
The exchange even produced some private emails from both Durie and Bob Browning but unfortunately they can't be shared with you.
Meanwhile, the phoenix has risen again now that Babcock & Brown Power has changed its name to Alinta Energy and we've booked flights to attend the February 22 EGM in Sydney to catch up with some old sparring partners.
Cornwall sums up the Mad Monk and his mentor
Payments to AWB directors still running hot
Peter Hemphill, the former Hobsons Bay mayor who is now back as a full-time reporter on The Weekly Times, has been doing a great job covering the on-going saga over controversial payments to former executives and directors at AWB.
After we first publically raised these retirement payments to former directors at the December 23 AGM, Hemphill has kept the pressure on as follows:
AWB director claims was offered inducement - Dec 30 front page story on farmer director's bombshell.
AWB grower backlash - Dec 30 account of AGM, complete with picture of yours truly in action trying to dress like a farmer.
Furore over AWB bribe claim - Jan 5 reaction to previous week's page one story.
AWB's Geneva contention - Jan 6 story on huge pay packet for AWB's mysterious man in Geneva.
AWB's $11 million man - Jan 11 story revealing that Thierry Dubois was actually paid $11 million in 2007-08.
This last story was a really good get because it showed how AWB attempted to fudge the figures by shifting some of last year's payout to the former Geneva boss into the previous year. The only comparable situation to this I'm aware of is the way former Foster's chairman Nobby Clark agreed to pay then CEO Peter Bartels $8 million to leave in 1992, but it was staggered over 4 years and therefore never disclosed in one hit. This pre-dated the better disclosure of pay packets back then we still only had bands without names attached.
The funniest thing about all of this tough coverage is that AWB and Qantas flew Peter Hemphill around the world in 2000 after naming him Australia's best grains reporter. The press release is still available here on the AWB website.
Rupert and the royals
Prince William had a hugely successful visit Down Under and our cartoonist Mark Cornwall does enjoy poking fun at those royal-hating Murdochs.
Mayne Report traffic doubles in 2009
Thanks to your loyal patronage The Mayne Report doubled its audience in 2009.
Annual page views jumped from 493,439 in 2008 to 1.14 million in 2009. Unique visitors also more than doubled from 313,725 in 2008 to 691,084 in 2009.
All we need to do now is start selling some advertising - or get some agent or media company to take on that role - and we might actually generate some revenue from all this freely available content.
The most active time were the months from July through to October which coincided with the end of year reports season, our capital raising plays, the 2009 AGM season and this series of popular articles for the Fairfax Media websites.
Our top three articles viewed in 2009 were as follows:
Capital raising plays since Jan 2009
The Mayne Report Rich List
All share transactions in 2009
It just goes to show that readers are particularly interested in whose got the money and how to make money on the sharemarket.
Below is an interesting breakdown of the most popular Mayne Report referrers for the year:
Google - 75,005
Fairfax - 43,948
Direct - 39,822
Twitter - 1,763
Crikey 1,345
If you haven't already, tune-in to our audio and video podcasts. Our audio podcasts deliver lively exchanges from AGMs and all our radio appearances. Additionally the video podcasts offer different episodes from The Mayne Report video blog and some television spots, usually from Sky's Business View program.
Furthermore, you can follow The Mayne Report on twitter or add our RSS feed to your personal reader for your favorite articles delivered the way you want it.
Donate to help fund our activism
Finally, don't forget that The Mayne Report is a free service which costs almost $100,000 a year to run and relies partly on donations to survive.
Thanks to everyone who has chipped in a collective $5000 worth of donations over the past few months and you can check out their details on this honour board.
It was really nice to get back from a three week driving holiday to Queensland and receive a $500 cheque from the same lovely old lady from Toorak who once handed over a cheque whilst I was on the feet in full flight at the microphone during the 2008 Commonwealth Bank AGM.
If you fancy giving us a hand to help fund our activism and keep The Mayne Report going as a free service, just click on the image below:
Raising funds to annoy Rupert in New York
It has been two years since we've travelled to New York and annoyed Rupert Murdoch at a News Corp AGM so come October we might do a special donations push to fund that particular $5000 indulgence, as the better half describes it. There's so much fascinating new material to cover with Rupert, including the whole newspaper paywall issue and this latest $US500 million legal settlement with Valassis which surprisingly left the shares higher today, despite the overall market being down.
Recalculating 300 valuations on The Mayne Report Rich List
Save for claiming Griffin Coal boss Ric Stowe was worth $720 million in 2009, BRW magazine generally does a good job with its various Australian Rich Lists but we've broadened their efforts to track any Australian who has ever been worth more than $10 million. We've got more than 1400 names with those who've fallen back below $10 million now italicised.
Our researcher and multi-media producer Shane Marden spent many hours in January updating the list to reflect moving share prices. There were more than 300 entries which were amended and what follows are some of the notable rises and falls:
Richard Uechtritz: the CEO of booming retailer JB Hi-Fi who owns about 3m shares or 2.94% of the company. The stock bottomed at $7 in December 2008 and has kept climbing against the trend to $21 and in early 2010 his stake is valued at more than $60 million.
William Phillips: owns more than 14.6m shares in Medusa Mining. The stock bottomed at 40c in December 2008 but has since risen to a significant peak of over $3 in early 2010 valuing his stake at more than $43 million.
Andrew Forrest: the Perth entrepreneur is now arguably Australia's richest man through his 30% stake or 930m shares in Fortescue Metals Group. The stock peaked at almost $12.80 in July 2008, bottomed at $1.20 in December 2008 and recovered back to $4.60 as of January 2010 valuing his stake at about $4.2 billion - down from a peak of nearly $12 billion.
Hans Mende: an executive director of Felix Resources and recently floated Whitehaven Coal, his share holdings are 37.6 million with Felix and 81 million with Whitehaven. His combined holdings peaked his wealth at more than $1.2 billion in June/July 2008, bottomed out in December 2008 down to more than $257 million and recovered by early 2010 to be worth more than $920 million.
Ken Tregonning: managing director of AED Oil, owns about 27m shares. The stock peaked at almost $11.50 in October 2007 when he was worth more than $270 million and in early 2010 was around 62c which values his stake at $16.7 million.
Plus some new entries and updates courtesy of BRW
BRW recently released an interesting edition tracking the earnings of our top sports stars so we've got a few of them in this latest batch of new and updated entries:
Robert Allenby: having already established himself as one of Australia's most successful golfers, he is still on the improve. In 2009 he had a very successful year pulling in nearly $5 million.
Marcus Ambrose: kicking goals in the lucrative California-based US NASCAR series which led to his best year of earnings in 2009 at more than $5.4 million.
Andrew Bogut: professional basketballer in the NBA playing with the Milwaukee Bucks. Originally from Melbourne, he moved to the US to play for the University of Utah as a teenager. In 2009 he signed a $60 million five-year contract extension.
Tim Cahill: one of Australia's best football exports, in 2009 he starred for Everton in the English Premier League which earned him just under $5 million for the year.
Hoss and Gillian Heinrich: owners of Military Rose who streeted her rivals to win Queensland's richest horse race - the $2 million Magic Millions. The construction boss and former chairman of The Gold Coast Turf Club owns the Heinrich Bloodstock business with his trainer wife Gillian and they have been the main buyers of yearlings in recent years.
Arthur Hood: departed as CEO of Lihir Gold in early 2010 and walked away with a $15 million golden handshake, comprising a termination payment of $2.3 million, a $1.3 million cash payment in lieu of rights that would be been awarded under his full-term contract, plus 3.5 million shares that were previously awarded and are worth more than $10 million.
Harry Kewell: arguably Australia's best-known soccer player of his generation who has made tens of millions playing in the English Premier League for the likes of Leeds and Liverpool. In 2009 he earned $9.5 million with Turkish club Galatasaray. The BRW claims $54 million.
Lucas Neill: another of Australia's top football exports. He has had a long career already but is still earning close to $5 million a year.
Geoff Ogilvy: a past winner of a prestigious major golf tournament, the US Open, he continues his success rising up the world rankings and expanding his wealth. His 2009 earnings were around $6.3 million.
O'Reilly family: run the legendary O'Reillys eco-tourism business in Lamington National Park show-casing arguably Australia's best remaining rain forest in the Gold Coast hinterland. Five brothers and three cousins were originally sold 800 acres to clear and farm in 1911 but over time they realised the fortune to be made from eco-tourism.
Ricky Ponting: one of Australia's all time best cricketers, and long time captain, with his Cricket Australia contract and lucrative sponsorship deals, he pulled in more than $4 million in 2009 alone.
Chad Reed: unheralded, he is an Australian Supercross champion with huge success in the US worth around $25 million. Earnings in 2009 were $8.8 million.
Casey Stoner: this Moto GP star has the second-biggest contract on the circuit which earned him $5 million in 2009 alone.
Craig Thompson: owner and managing director of Fremantle-based Seacorp shipping, and owner of the Mount Hallowell horse stud south of Perth, paid $700,000 in January 2010 for a broodmare to be the star of his stud.
John Upham: career publican who grew up near Warrnambool and in 2009 came out of retirement to buy the Lorne Hotel for almost $20 million.
Tiger, Obama and Oprah
Meanwhile, Cornwall has this take on a President and two exceedingly wealthy American entertainment stars:
Introducing the Cornwall shop
Former Fairfax and Crikey cartoonist Mark Cornwall has been contributing his satirical commentary to the Mayne Report since March 2009. The cartoons are now available to purchase and make a great gift. Here is a collection of his best cartoons and there are now also six amusing animations. Check out some of his latest offerings throughout the edition:
QBE Insurance sees the light on AGM webcasting
After praising QBE Insurance at last year's AGM we then became mired in an unfortunate dispute after the company declined to broadcast the full debate on its website, limiting the archive to just the chairman and CEO addresses.
With such a great story to tell, this was a completely unnecessary step and finished with a promised board tilt if they didn't get with the program in 2010. The last three emails with general counsel Duncan Ramsay last April were as follows:
From: Duncan
Sent: 04/09/2009 1:35 PM
To: Stephen
Stephen, per our usual practice, the webcast has been abridged to concentrate on the addresses by the Chairman and CEO.
This is because they represent QBE's comments on last year and this year's outlook. It is also for reasons of time and cost. We excluded all the debate ie so not selective.
I am sure you can at least summarise the other discussion at the meeting for your father. I note there are AFR and SMH articles on the meeting. The webcast is hosted externally and we do not have a DVD nor is one planned.
Regards, Duncan Ramsay
___________________________________
From: stephen@maynereport.com
Sent: 04/09/2009 02:32 PM
To: Duncan
Duncan, this is a very simply issue. QBE should provide a record of the AGM for its shareholders. You have a complete record.
The chairman was asked at the AGM about webcasting and shareholders were told it would be available after the meeting. It is not.
The chairman made a number of comments about succession, investments and AIG's conduct which I believe were significant and should be made available to all shareholders and the broader market. Indeed, I just talked about all of these things on Sky's Business View program in the last hour.
Please don't make this difficult. I've been praising QBE in the media and want to do likewise in a comment piece I'll be writing for the Fairfax websites. However, without a full record of what was said, this is very difficult.
This is an issue I feel strongly about. Best practice is a full webcast. You don't see hansard in Parliament getting edited back.
As for comments representing QBE's position, surely everything the chairman said at the meeting represents QBE's position.
If you don't change your position, I will consider running for your board at next year's AGM on a platform that the company treat its small shareholders better and get with the program in terms of shareholder engagement.
Regards, Stephen Mayne
__________________________________
From: Duncan Ramsay
Sent: 04/09/2009 5:51 PM
To: Stephen
Stephen,
There has been wide coverage of the AGM in the print media, TV and internet, including of the commentary at the AGM.
I am not aware of any legal requirement or ASX Corporate Governance Council recommendation to provide a complete webcast of every minute of the AGM.
A webcast has been made available on the website, even if it does not meet your specific requirements. The presentation and release of information on our website is a matter for management.
Based on the feedback received from our retail shareholders at the AGM, they appear to be generally happy with the way in which the Board and management are running the company and the level of information they are receiving, e.g. please see the report on Lateline Business last night.
The AGM is open to be attended by all shareholders and/or their appointed proxies should they wish to attend and listen to all questions.
As to whether you choose to nominate for election is a matter for you.
Regards, Duncan
_________________________________
Fast forward 10 months and the tone has changed considerably, as usually happens when a board tilt is imminent. An initial email to the general counsel extracted that the AGM would be held on March 31 and then we had this exchange:
From Stephen to Duncan
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