2008 Alumina AGM campaign speech transcript

Stephen Mayne: I've been banging my head against a brickwall with Alumina for the last 5 years. In 2003 I came along and basically made the same points you heard earlier today, that we are a special company, we only have a handful of employees, we don't much, we don't have control over much. Therefore we don't need to have 5 non executive directors, a CEO, a finance director, and a company secretary/general counsel.

Also, I made the point that our directors are paid too much, and that was back in 2003 when the chairman was on $212,000 a year, and the individual non executive directors were on $85,000 a year. I've been making the point excessively and I've been continually been ignored by the board. Last year the chairman was on $316,000 a year, he's had a pay rise increase of 50% over that period, and the non executive directors are now on $132,000 and they've had a pay rise increase of 54% over that period. At the same time the share price has only gone up 20-25%, although there has been a nice dividend flow come from there.

In terms of the size of the board, I was at the Iress Technology AGM yesterday, they've had 4 non executive, and now they are down to 3. Last week I was in Perth at WA News AGM, they have 4 non executive directors. So the fact that we only have probably ten employees, and we have a bigger board than many other companies I think just demonstrates the point. That we are being massively over-serviced for what we require to basically administer our postbox company and negotiate with Alcoa from time to time.

So I have become exasperated and decided that the only way to crank up the pressure, to get the board to acknowledge some of these points, was to stand for election and put the issues out there that way. Now I appreciate that I have Buckley's chance of getting elected, but I think it would be a very good purpose to send a message from the floor today, that you would like action taken on some of these issues. I will get clobbered in the proxies but we can send a message in a show of hands.

Now in terms of the other point about this board, the world changed on November 25 last year when John Howard was voted out of office. John Howard was one of the great climate change deniers, and our company was very much associated with the lobbying around that climate change denial. We were founding members of the Stone Industry Greenhouse network, we've been mentioned adversely in books by the likes of Clive Hamilton and Guy Pearce.

None of our directors were invited to the 20-20 summit, John Marley, straight after the election, decided he was out of here. I think it was a good move, given he was so associated with the whole Howard do nothing deny, delay approach. I would have got out of there in a flash as well. I think he's done the right thing in leaving.

I think this board needs to therefore refresh its personnel, to get with the program, and to appreciate that we now have Garnaut Report coming and we actually have to be inside the tent - we are now completely outside the tent. I had a catch up last year with a senior Brumby government advisor, who was speaking very critically about the fact that this company have been climate change deniers. That they've taken huge subsidies from cheap power, and they go into negotiations with this board and they see the former finance director of WMC as the chairman, they see the former Alcoa guy there, they don't see any personnel change.

I think the board does need to be refreshed to reflect the fact that carbon taxes, carbon trading systems are coming, and we need to negotiate to get the best deal we possibly can, and that's where I could add some value. As a former press secretary in the Kennett government to someone who works with media, journalists, politics. I've met Penny Wong, I've met Peter Garrett, I've met John Brumby, I'm actually connected. Not in a close way, but I have had dealings with these people, that they would talk to me, that I've come across them before. I actually think they would see someone who accepts that climate change is here and accepts that the whole denial period is gone, and would add some value to this board. It would be a sign that we do appreciate that there is a new environment.

This current board - average age 64, very long service, and for mine one of the great tragedies of Australia, is the fact that so much of our resources dowry has been mismanaged. You can site the companies with the likes of Rio, Shell, BP, Chevron, Anglo American, Mitsubishi, Xstrata they all own well over $10b worth of Australian resource assets. There are so few Australian resource companies left. Too often you have this situation. We're just a little minority shareholder - we don't control it, a big American company actually runs the business. Same as Bass Strait which is run by Exxon.

Too many of our directors have been associated, in my view, with that mismanagement of our resources dowry. I don't want to speak ill of Mark Rainer, but i was in this 8 years ago at the last Pasminco AGM, Pasminco blew up a couple of billon dollars and went broke. I thought to myself that's the end of Mark's career as non executive chairman of company because of the major destruction of value. Yet here we are 8 years later and he's finally retiring.

I think the message here is that we haven't refreshed our directors club. Our directors have generally mismanaged Australia's resources dowry. We haven't done well enough. We haven't turned over the talent, and this is basically an old boy, Melbourne mining club board. Ron Mcneily great job at Worley Parsons and 40 years at BHP, the chairman - 30 years at WMC, Mark Rainer - 30 years at Rio Tinto. Many of them I think their days are passed. I think we need to renew the board because of the change of political environment and because of the personnel of our board and that fact that we need a new generation of talent coming through.

So, I don't say that I'm the best guy around, I'm primarily standing to send a message on this whole pay issue, but if you do vote for me today, you will also send a message to the board about this question of board renewal, about getting with the program on climate change and sustainability, and about the excessive $12.6 million a year that we are paying to have our postbox company administered.

So by voting for me by show of hands, you won't be risking me getting on the board because the proxies will flog me, but you will be sending the board a strong message and I invite you to do that today.

Copyright © 2022 The Mayne Report. All rights reserved

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