Turnbull pay plan, Babcock, pokies push, Brisconnections, Rich List, Costa and Stockdale

February 19, 2010

Dear Mayne Reporters,

First up today, check out this new video which includes a cameo from our 5 year old daughter Alice on the question of getting kids out of pokies venues. The video incorporates debate from the recent Tatt's and Tabcorp AGMs.

And in a related development ahead of the Woolies AGM in Melbourne on Thursday, Paul Bendat's www.pokieact.org has today launched its major campaign against the nation's biggest pokies operator. Check out the press statement.

Last rites for Babcock empire

Former Babcock & Brown CEO Phil Green was recently spotted bushwalking through Noosa National Park and you can't blame the man for trying to get as far away from the world's financial capitals as possible.

The two international directors of Babcock, Dieter Rampl and Joe Raby, have quit the board today, S&P has withdrawn its credit rating and with the stock suspended due to bank disputes, it is only a matter of time before the remaining directors call in administrators and then the banks come over the top with receivers.

This will make life a lot easier for the revolting stable of Babcock listed funds because receivership is a trigger event to tear up the notorious Babcock management contracts. Everest Babcock & Brown have already sent out the notice of meeting to change their name to Everest Capital and you can be assured that there will be nothing called Babcock listed on the ASX by the end of next year.

Malcolm Turnbull's executive pay plan

Malcolm Turnbull surprised many people in Question Time today when he suggested non-binding votes on executive pay should be made binding.

Unfortunately, this is an unworkable proposal as Malcolm should know. You can't make something as generic as a report into remuneration binding. What happens if it is defeated? Does the CEO give back his bonus? Are executive contracts deemed null and void?

Rather than over-reaching with something that the government could never endorse, Malcolm should instead get behind specific proposals such as the push to give shareholders a right of veto over any executive payout exceeding $1 million.

I'll be discussing all this with Frank Kelly on ABC Radio National at 6.45am tomorrow morning if anyone is up that early.

Brisconnections debacle

There has been plenty of media interest of late in the BrisConnections debacle. Watch this video of The 7.30 Report story from last Thursday which was partly shot from outside the ABC Learning creditors meeting three days earlier.

Similarly, listen to the interview with Mike Smith on 4BC last Friday.

There were no trades in BrisConnections today, but you can buy 85.7 million shares for 0.1c and a further 27.2 million shares for 0.2c each.

Therefore, for the princely sum of $139,300, 28.2% of BrisConnections is available, which brings with it a liability to shell out another $225.8 million over the next 18 months for paper that is probably worth about $150 million.

Still, with 28.2% of the company you could quite easily call an EGM and sack the board, which is being suggested by some people in the colourful world of day trading.

Kohler nails the CDO and CDS shemozzle

The world's business commentators and analysts are struggling to come to grips with the unchartered waters we're in, but over the past week we've seen some fabulous business journalism from Alan Kohler on Business Spectator.

If you read this column from November 19 followed by this column today, you'll have a pretty good explanation of the time bomb in the global financial system related to collatoralised debt obligations and credit default swaps.

Catching up with Alan Stockdale at Symex Holdings AGM

After more than a decade of no contact with Alan Stockdale, my old boss from the early 1990s when he was turning Victoria on its head as the state Treasurer, it was nice to catch up with him publically and later privately at the Symex Holdings AGM in Melbourne last Thursday.

We've packaged up the audio highlights but particularly enjoyed this exchange suggesting he was over-committed and should therefore quit the Mariner and Senetas board whilst sticking with the Liberal Party presidency.

Grilling the Geelong Football Club President at Costa Exchange AGM

Frank Costa is the king of Geelong so we dropped in to meet the President of Geelong Football Club at the AGM of listed agri-business company Costa Exchange on Friday morning whilst Telstra was filibustering its way through more than 2 hours of formal presentations.

No other Costa shareholder spoke so we added about 15 minutes to proceedings but no-one seemed to mine. We've grouped the audio exchanges into three batches:

Bankers, debt covenants, Frank's debts, water rights, privatisation, capital raisings and Timbercorp relationship

Frank's commitment and board fees

Timbercorp capital support and will CEO salary drop with the profit forecast?

Reshaping the Rich List

The Sunday Telegraph made "urgent contact" at 5pm on Friday afternoon after the editors decided it was time to come up with a big splash on the dramatically plunging fortunes of our Rich Listers.

You can read the end result here, but it was a little disappointing they did not use the following Rupert Murdoch statistics I emailed through:

Rupert Murdoch: News Corp shares are down from $25 to $10 over past year, so Murdoch family stake has dropped from $8bn to $3bn, but Rupert told shareholders in October he has no debt on those shares so that is pure wealth.

Much of the other stuff was incorporated into the story and I also sent them a list of the 20 "former billionaires" created by the market chaos since BRW came up with 44 of them in their latest Rich List last May.

Summary of AGM season for RRR

RRR, Australia's biggest and best community radio station, had your correspondent in this morning for a comprehensive discussion on the AGM season. Have a listen as we rattled through the private debts of billionaires, security guards, ABC Learning, remuneration report voting, bigger attendances and various other issues.

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That's all for now.

Do ya best, Stephen Mayne