Running for the Macquarie board in 2006

By Stephen Mayne
January 17, 2008

Here are two stories from Crikey in July 2006, one shortly before the Macquarie Bank and the other straight after. A 15% primary vote was a good result in the circumstances.

Let us know the proxies now

As you read this, Macquarie Bank chairman David Clarke and his fellow directors will know the exact proxy position for the first ever contested Millionaire Factory board election at this Thursday's AGM – but he certainly won't be letting on to me. This imbalance of information is just one of the many rorts tolerated by ASIC, the ASX and the Corporations Law in Australian corporate elections.

I was hoping to write to all Macquarie Bank shareholders as part of the tilt, but the board decided they would charge $3600 for the privilege of receiving an electronic version of their share register, something which is standard in political elections but has never happened in my 24 board tilts over the past six years.

In the last three tilts – AMP in 2003 and Fairfax and Gunns last year – the boards were good enough to provide a copy of the largest 200 beneficial shareholders. This was progress but the Millionaire Factory haven't even come good with that.

The bank has also conceded that the positions on the voting paper were not determined by ballot, which explains why I'm last of the three candidates.

This might come as a surprise to the political junkies who read Crikey but I spent a couple of hours last night crunching the numbers and concluded that 100% of the directed proxies would not have been good enough to win a seat in more than half of my previous 23 tilts. This is because of the "no vacancy" rort when boards declare there isn't a position for the challenger, meaning you have to knock off an incumbent, who typically get re-elected with 99% of the proxies in their favour.

The reason that 100% is not enough to win is because an average of almost 10% of proxies have been given by default to the chairman as discretionary votes by those dopey shareholders who just sign the form and send it back in the reply-paid envelope when all the boxes aren't ticked. Imagine if incumbent governments could assume every box not ticked was a vote against a challenger.

Macquarie haven't done the "no vacancy" rort like in 18 of the other tilts, but they certainly haven't run a fair election and I'll be lucky to get into double figures, even though the platform to ban staff from taking up shares in Macquarie floats and placements is very strong. Is it too much to ask that Australia's largest capital raiser stop a practice which is illegal in the world's largest capital market, the USA?

This is unique research and well worth a read because Australian corporate elections are a complete joke and it really is time that the Australian Electoral Commission stepped in. If councils and unions can't be trusted to run fair elections, why should companies? The evidence of abuse is now there for the world to see.

Don't expect the Murdoch press to run with this story because News Corp has been the worst offender, rejecting nominations on questionable grounds and then completely censoring the platform in the one year out of four that my nomination was accepted.

A Macquarie marathon

By Stephen Mayne

After chairing his longest ever AGM, Macquarie Bank co-founder David Clarke was clearly quite exasperated with the whole process as he hurried off to take a much-needed leak once the polls were called. However, when Clarke later complained about the quality of debate during the four hour saga, I told him that he was part of the problem because as chairman of the meeting he should have shut down the wafflers more assertively.

For instance, we finally got onto the remuneration report two hours into the meeting and Clarke tolerated an opening contribution of ten minutes from an Indian chap on the merits of options. After three minutes he should have said, "Excuse me sir, do you have a question?"

As usual, the bloke who wasted the most time was Crazy Jack Tilburn. JP Morgan's top-rated banking analyst Brian Johnson reflected the views of many when he started sledging Tilburn for raving and branded him "outrageous". In unprecedented scenes which the gossip columns all ignored today, Tilburn then went over to Johnston and started poking him in the chest and then invited him outside for a punch-up.

"Order, order," said chairman Clarke as Johnson declined the invitation and Crazy Jack returned to his seat.

I rang Crazy Jack this morning and he answered the phone as follows: "Good morning, it's quarter to 12, this is Jack Tilburn speaking." He confirmed that he will turn 80 on 15 November and that he did indeed say the following to Johnson: "Listen pal, if you interrupt me again you can meet me outside. I'll take you on any day."

This really is a shame because we desperately need analysts like Johnson improving the level of debate at AGMs, but then he gets physically threatened by a retired teacher who has lost his marbles.

Johnson has spoken gushingly about the Millionaires Factory at the last four AGMs and did it again yesterday, although he also appeared to extract a confirmation that Macquarie has just pocketed a profit of between $100 million and $200 million selling its North American oil and gas assets.

Clarke also disenfranchised shareholders who bothered attending the AGM by having a poll on all resolutions and not disclosing the proxies until after all ballots were cast at about 3pm. This was designed to avoid the embarrassment of the remuneration report going down on the floor of the meeting or my tilt getting up.

Ron Walker was certainly a little embarrassed last year when I had the numbers on the floor of the Fairfax AGM and beating Rupert on the floor in 2002 led to this Lateline debate.

A poll takes the final election result out of the AGM but, amusingly, Macquarie Bank's initial announcement to the ASX at 5.10pm yesterday declared that that "all eight motions were passed by the requisite majorities". This correction landed at 5.37pm pointing out that Macquarie had actually recorded the first defeated resolution of its ten-year history as a listed company, albeit not one the board endorsed.