Ten Network 2010 AGM transcripts

December 14, 2010

What promises has the new chairman made to get the top job and why isn't their room to have a CEO on the board?

Stephen Mayne:
What has the board resolved to pay our new chairman?

Nick Falloon: As of yesterday, Mr Long accepted the invitation of the board to become the chairman. We're seeking advice at the moment for the rem committee of the board, that will be put in place in the new term.

Stephen Mayne: How much headroom do we have in the current approval of non executive director fees?

Nick Falloon: Not a lot currently.

Stephen Mayne: So some of our billionaires acting pro-bono?

A question for Brian, I'm a local Manningham councillor, a council in the suburbs of Melbourne, we're meeting tonight to elect a new mayor. There's always promises made, deals done to get into any leadership position. Just ask Frank Lowy and the World Cup bid, ask any politician, ask anyone who's reached a prestigious, powerful leadership position in any institution - promises are made.

Brian, what promises have you made to the four shareholders who represent 42% of this company, who have clearly supported you into the job - on what grounds?

Brian Long:
Absolutely no promises. I've spent 30 years and longer working in the profession, and what I hold highest of all, is independence, objectivity and reputation. I've made no promises.

Stephen Mayne: What do you know about the media industry?

Brian Long: Well I thought you mentioned earlier in the meeting that I had some experience in working with PBL organisation, I have, and a number of other, as professional services provider, a number of other media companies - Fairfax, Hoyts, PBL etc.

Stephen Mayne: As a non executive chairman, are you comfortable leading, the only ASX100 company that I'm aware of, that won't have an executive director?

Brian Long: I think Stephen I was to be the chairman yesterday. The full board, including the four new directors, have not met yet, and all matters to do with board composition is a matter for the board, which they will discuss in the normal course. So that is a future consideration and I don't have a view I'm prepared to give right now.

Stephen Mayne: Do you support the concept, that a major public company, ought to have a CEO of the whole business - not just a CEO of iCorp or a CEO of television, and because we are losing our CEO, our executive chairman, that convention is that we move to appoint a CEO of the whole company who is on the board.

My concern, I've heard others say this, is that the impression it leaves if you don't actually do the conventional thing of appointing a CEO to the board, is that management is a bit sidelined, and that this is a company that will be run by the vested interests on the board. Management won't feel like they are respected, but they have the appropriate authority, if not even going to give them a voting board seat.

So I am keen to hear whether you think, 11 neds and no execs, unprecedented in the current market, in the ASX100, is a viable appropriate structure going forward. Particularly given the obvious interests of the four shareholders with that 42%.

Brian Long: Stephen, I think you've just re-phrased your first question, and either way I answered it first. It is a matter which the board will consider. If you're asking whether or not the company should have a CEO, than the answer to that is clearly yes, and again that's a matter of when the board gets together that we will need to consider.

Stephen Mayne: I can understand the arguments about people with media interests, who know what they are talking about who have a long interest in the industry, who could add some value. Of course there is the conflict of interest question, but we've dealt with that.

Why on earth, can a mining heiress, with no experience whatsoever in the media industry, who reportedly is simply wanting to get influence and stop people attacking the new mining tax or something?

Why are you supporting her being represented on this board when there was no relevant industry experience, and when we have already three shareholders represented?

There is no other company in Australia who've got four representative directors for shareholders. Ten percent is not normally a level where you go, yes you're on. You had Perpetual for a half a dozen years with more than 10%. They were never represented.

Nick Falloon: They never wanted to be represented Stephen. Perpetual didn't ask for a board seat - it's not their normal practice. They are a professional investing firm. So we are giving you plenty of air time here today.

I mean Gina Rinehart is a very successful business woman in her own right, probably one of Australia's most successful, and she has made a decision to invest in this company - your company, and put her money where her mouth is, and she as a successful business lady we the board felt it appropriate to offer her, as we have done to others, a seat on the board - plain and simple, and she is very successful.

I am happy for you to sit here and cast aspersions on people, but we are very comfortable in offering a board seat. She brings a different skill set - noted, but there are 11 directors on this board, and she will be welcome.


James Packer got it wrong - congratulations to Nick Falloon for a job well done

Stephen Mayne: The Fin Review today, Rear Window column, talking about you Mr chairman, it says "It is possible one of Ten's directors will thank Faloon for his 8 years of service. It's highly unlikely any mention will be made of the $26.5 million Ten has paid him since 2002.

I just want to check, is that accurate?

Nick Falloon: I have no idea, I haven't looked at it Stephen, and it's been nearly nine years, that I do remember.

Stephen Mayne:
I would like to say finally that we should support the remuneration report. You have been paid well, but over a long period of time, apart from shafting us on the SPP, you've done a good job. I 'd like to put on the record that you have been treated a little harshly in the last few months, the way you were executed by the billionaires like this, and I think you've done a good job.


What does director Christine Holgate think about how Ten shafted retail shareholders by failing to do an SPP after a placement?

Stephen Mayne:
What this company did was it did a selective institutional placement with the big end of town at $1.15 a share - a discounted big end of town placement.

Then, unlike the vast majority of issuers in this market, you've refused despite phone calls, emails, lobbying, board tilts - you name it. Absolutely no acknowledgment, that when you do a selective institutional placement with the big end of town, at a discount, you ought to follow through and look after your small retail shareholders, with a share purchase plan, on exactly the same terms.

So, I hope all the directors - including Lachlan and Bruce, are hearing this message that we are still to this day owed a discounted share purchase plan, and I'm interested in hearing from the candidate as to whether she philosophically accepts the argument, that when you do institutional deals, you should follow through on exactly the same terms for retail, and if she does, will she lobby for that to happen in 2011 when our obstinate, current chairman, won't be in the way anymore.

Nick Falloon: Thank you for the question. I won't put the question to Christine, I'll say this as I said last year, it's not obstinence that's involved. We were under, as a lot of companies were, extreme stress in the middle of the GFC and with our major Canadian shareholder getting out. We took that approach, and all shareholders have benefited from that approach.

We currently do need to go back to the market for any capital, that's why we haven't been able to do so. I know Stephen this is a hobby horse of yours and in principle I agree with you, the opportunity did not present itself, as I said last year.

I have expressed this view to this board, as I am believing that in future, if we do we will consider this I can assure you. All the board members have made aware that, when the opportunity does present itself.

But it was a question of taking advantage of the market when we could to ensure the overall survival of this company, and let me tell you, if you look at it in hindsight, it worked very successfully. You now have a company that didn't get destroyed, like a lot of other companies did, that has a solid balance sheet, and is in a position to face the future.

But the principle of what you talk about, I don't refute.