Passivity everywhere at QBE in 2001

By Stephen Mayne
February 8, 2008

This was sent to Crikey subscribers shortly after the QBE Insurance AGM on April 19, 2001.

Australia's most Catholic (yes, yes gratuitous reference but you'll be amused to know deputy chairman John Phillips actually sang for the Pope once) major company board, QBE Insurance, fronted an incredibly passive group of shareholders at the Westin Hotel from 11am.

We missed most of the formal addresses but the questions were very lame and as we'd failed to line up a proxy there was no opportunity to get amongst it. I'd have loved to throw a couple of curlies at Nick Greiner when he was up for re-election but they were requiring you show a yellow shareholders card and the bloke I was sitting next to was general manager of personel and hardly likely to hand his card over.

QBE are a rare beast in Australia because they have consistently kicked butt for the past 10 years. Chairman John Cloney is a rare genuine Aussie corporate legend and with the shares at a record high as they pick over the HIH carcass, shareholders had nothing to complain about.

The only interesting bit came at the end when MD Frank O'Hallaron demanded the federal and state governments help bail out stranded HIH policyholders buy reducing excessive insurance stamp duties and handing back some of the $500 million GST windfall from retrospective legislation which did help send HIH broke with a one-off $50 million hit last year.

There is talk of a one per cent levy on other insurance policyholders across the country but Franky and his board would prefer the taxpayers step in rather than his customers or his shareholders, of which he is one to the tune of about $12 million in QBE.

Frankie is underpaid with only $706,000 going his way last year but at least he got another whack of 200,000 options but the hurdles were encouragingly high with Earnings Per Share required to grow by 12.5 per cent for each of the next three years for him to qualify.

Chairman John observed that these hurdles were "much higher than almost anybody else in the market".

The only options hurdle we can recall that was higher was Catherine Livingstone at Cochlear but if anyone else can beat Frank's 37.5% EPS growth over three years we'd be keen to hear from you.