13 questions lodged at 2021 Domain AGM

November 7, 2021

Here is the text of the 13 questions lodged at 2021 Domain Holdings AGM held on November 4. Only the last one wasn't asked and it was technical.

In 2017, our chairman Nick Falloon presented to various bankers that Fairfax was aiming for Domain to deliver EBITDA of $185m in financial year 2020-21. How did we only achieve $106 million when the business generated $120m of EBITDA the year before the float? Have we really delivered no profit growth in 4 years?

Answer: it has a been a tough 4 years.

Did any of the 5 main proxy advisers in the Australian market - ACSI, ASA, Ownership Matters, Glass Lewis and ISS - recommend a vote against any of today's resolutions, including the remuneration report? Which of the proxy advisers are covering us and has their been a material proxy protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on today's resolutions so shareholders can ask questions if there have been any protest votes?

Answer: They are all in favour of all items.

Greg Ellis is a former CEO of REA so has great visibility into the Australian property listings market. What is Greg's view on why REA is now capitalised at $21.65 billion, 6.4 times Domain's market capitalisation of $3.38 billion. Why haven't we bridged the gap during the period he has been on the Domain board?

Answer: Best answered by sharemarket analysts because Greg doesn't believe REA is 6.4 times more valuable than Domain.

Congratulations to Mike Sneesby on his promotion to CEO of Nine Entertainment. Nine is currently capitalised at $4.82 billion and Nine's 59% stake in Domain is worth $2 billion with the stock at a record high of $5.80. What is so special about 59% and why hasn't Nine opportunistically bought or sold Domain shares during the ups and downs of the market. We could have topped up with another 3% at less than $2 a share in April last year.

Answer: we're happy with 59%.

Why hasn't Domain ever run a moral campaign against REA, pointing out that it is controlled by the unethical Murdoch family which backed Donald Trump and promotes climate denialism world wide. Many property owners and real estate agents might switch their business from REA to Domain if the various News Corp atrocities were better known to them. Get on the front foot against the Murdoch bullies, for once.

Answer: We'll just focus on running our business but thanks for the suggestion.

Was the $120m pre-float EBITDA forecast assisted by an increase in commissions Fairfax paid Domain for selling commercial real estate and have these commissions subsequently been reduced to more sensible commercial levels. Could you increase transparency and disclosure about these inter-company dealings between Nine and Domain.

Answer: All related party transactions are appropriate and fully disclosed.

There was some media last year about Domain funding a golf membership that was accessed by the chairman or a member of his family. Could the chairman comment on this situation, along with one of the independent directors. Also, is it correct that the chairman's personal home featured on the cover of Domain. Was that appropriate and was this full disclosed at the time?

Answer: chair Falloon said the golf club situation was an issue for Nine and also clarified the house sale in an answer which even attracted interest from Nine's own gossip columnists.

Congratulations on the decision to repay $5.7m in JobKeeper, which we didn't need and didn't qualify for. Could Diana comment on whether this a decision imposed on us by 59% shareholder Nine or something that the Domain board resolved independently. Could Mike Sneesby and Nick Falloon comment on whether it is correct that Nine chairman and former Federal Treasurer Peter Costello is a vociferous critic of JobKeeper and wanted public companies he was associated with to avoid it like the plague.

Answer: it was a Domain decision.

Thanks for disclosing the proxies ahead of the debate on each resolution. Could Jason comment on how important this LTI grant is to keep him motivated. Also, given the interesting discussions across a range of topics today, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website.

Answer: nothing particularly insightful.

Could Mike Sneesby comment on how much of his time he is spending on Domain and how well he feels that he now understands the business, relative to Stan, Nine's TV operation and the traditional Fairfax newspaper operation.

Answer: Yes, I'm getting up to speed.

Could Diana Eilert comment on whether she believes Domain could flourish as an independent company if Nine was to sell out, similar to the way that Carsales has flourished since decoupling from Nine and Seek has flourished since PBL sold its 25% stake. How dependent on Nine is Domain, in her opinion?

Answer: it's an important relationship but we could thrive independently too.

Greg Ellis made more than $10m during his time as CEO of REA Group. Does he retain any REA shares and why does he only own 10,581 shares in Domain. Why not show some more confidence in the Domain business and get some serious skin in the game, like what happened at REA.

Answer: Some more Domain shares will show up shortly and he never owned more than 11,000 REA shares and owns none now.

Next year, could general business questions please be asked during item 1 covering the accounts. There was no drop down box for item 1 when lodging questions today.