After more than 3 and a half hours of gruelling debate, chairman Roger Corbett finally closed what will probably be his last AGM as Fairfax Media chairman.
ASA representative Stephen Mayne and company secretary Gail Hambly have attended about 20 Fairfax AGMs between them and both agreed afterwards that 2012 was the most dramatic yet.
Billionaire Gina Rinehart used her 15% stake to deliver Fairfax a destabilising “first strike” on its remuneration report and it was done in a highly unusual way with Hancock Prospecting's chief development officer, John Klepec, waiting until after the AGM had closed to vote the stake from the floor in a poll.
Mr Corbett pre-emptively revealed during his opening address that 19% of the proxies were against the remuneration report, so with Hancock joining the protest, the final Against vote finished at 34.4%.
Hancock Prospecting also voted against the LTI grant for CEO Greg Hywood and the election of newly appointed director James Millar, a former CEO of Ernst & Young's Sydney practice.
The ASA held 2.2 million undirected proxies and, after seeing that outside board challenger Peter Cox only had support from 2.4% of the proxy votes, we urged Mr Klepec to send the board a message and support Mr Cox in the poll.
To the surprise of many, she did this, lifting Mr Cox's final result to a respectable 24%.
Mr Cox is a veteran media figure who performed well at the AGM, adding much colour and interest to the debate.
Seeing him cross swords on detailed strategic issues with CEO Greg Hywood was illuminating and we came away also impressed with Mr Hywood's knowledge and determination to tackle the cyclical and structural issues which have so harmed the company.
ASA was first to the microphone in the debate, attempting to engage Mr Corbett in some retrospective analysis of where it all went wrong at a company that once had a $5 share price, but is now not even half as valuable as any of the 3 businesses which have destroyed its newspaper classified advertising franchise, namely Seek.com, Carsales.com and REA Group.
The ducking, weaving and stonewalling from the chair was very disappointing, confirming our view that he should retire before next year's AGM when he would have served as a director for 10 disappointing years.
Mr Corbett's best contribution to the meeting came right at the end when he accepted our spur of the moment proposal to vote our undirected proxies in favour of the remuneration report if he undertook to cut his chairman's fee from $432,000 in 2011-12, to less than $400,000 in 2012-13.
If nothing else, this demonstrated how the 272 Fairfax shareholders who appointed ASA to represent them at the AGM, collectively provided voting leverage which extracted some pay restraint at the very top of the company.
And who said the AGM is dead?
There were 5 directors seeking new 3 year terms on the board and the chairman didn't allow any of them to speak to their nomination.
Each was dealt with separately and ASA asked questions of all candidates, particularly related to the disappointingly small shareholdings that the directors hold in the company.
For instance, Mr Corbett has received more than $2 million in cash fees from Fairfax shareholders since 2003 yet only owns shares worth about $40,000. Where is the alignment?
There was widespread media coverage of the AGM, including about the role played by the ASA. Indeed, the ASA representative conducted live television interviews on Sky Business and ABC1 during the AGM.
The camembert sandwiches at one of Melbourne's nicest hotels provided some small solace for long-suffering shareholders after the marathon debate, as did the 8% lift in the share price on the day. Alas the stock was back below 40c by Cup Day, as investors have collectively dropped more than $2 billion over the past 5 years.
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