14 Scentre Group 2022 questions

January 15, 2023

Here is the text of the 14 questions Stephen Mayne lodged at the 2022 Scentre Group AGM held on April 7, 2022 and check out this partial transcript demonstrating how chair Brian Schwartz butchered most of them.

1. (asked 2nd) Well done again for not claiming any Jobkeeper in contrast to Vicinity Centres which claimed $23 million for 1200 staff and refused to pay any back like others listed companies such as CIMIC, JB Hi Fi, Harvey Norman, Premier Investments, Super Retail and Cochlear did. What has been the reaction to our ethical positive from staff, government, tenants, shareholders and the community, particularly as more details emerged about the biggest waste of government money in Australian history where $38 billion was paid to claimants like Vicinity Centres which didn't qualify under the rules of the $90 billion scheme.

Watch video of chair's response via Twitter.

2. (asked 1st) Voting disclosure question submitted as follows: "When disclosing the outcome of voting on all resolutions today, including this proposed grant of performance rights, could you please advise the ASX how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative adopted by the likes of Metcash, Altium and Dexus after their 2021 AGMs."

Chair's version of the question mangled with an answer: "So the first question, I'm just reading them as we go. The first question is, in fact, a procedural question, wanting to know “how many shareholders voted for and against each item, similar to what happens” elsewhere. We hear the comment. We do provide a fair amount of information to the market. We will have a look at it. We only got these questions, in fact, yesterday, and again, I appreciative that we did get them before the meeting. But clearly that is something that we will need to look at. I think that whilst there are a couple of companies that do it that way, the overwhelming majority of companies actually do it the way we did, but we will look at that each issue of additional disclosure."

Watch video of his response via Twitter.

3. (Asked 8th) At the tender age of 59, Steven Leigh is the only Scentre Group director under the age of 60. Why is the youngest director resigning rather than other directors and given that the chairman turns 70 this year and has served on Westfield boards since 2009, when is he planning to retire? Will he rule out recontesting again in 2025 if elected for another 3 year term today.

4. (asked 6th) Congratulations to Elliott Rusonow on being appointed CEO and well done to Peter Allen for a stellar over many years with the group. Could Eric explain his connection to the founding Lowy family and could the chairman comment on whether any other Lowy family associates are on the Scentre Group payroll, not that that would be a bad thing. Were any Lowy family members informally or formally consulted before Elliott's appointment as CEO was announced.

5. (asked 9th) Scentre Group shares closed at $3.07 last night giving us a market capitalisation of $16.1 billion, yet we claim to have net assets of $19.2 billion. Could auditor Megan Watson comment on why her approved valuation of the assets is so different to the market's. If we are so confident about our $34 billion book value for our 42 properties, why don't we sell off some assets at book value or above to prove that the market is wrong? Could the chair and CEO join with the auditor in commenting on this ongoing material trading discount to NTA ever since COVID hit and online retail took off.

6. (asked 13th) Could CEO Peter Allen comment on the likely timing for the proposed $500 million-plus redevelopment and expansion of Westfield Doncaster in Melbourne, which has been supported by Manningham council and the Victorian Government. This was the first shopping centre Frank Lowy developed outside NSW. He bought the land off local apple orchardists almost 50 years ago. Now it has annual pre-COVID sales of $950 million and a book value of $2.23 billion, making it our 5th most value centre. Also, the 2021 property compendium says Westfield Doncaster was last redeveloped in 2020. But this was only a $30 million expansion of the restaurant precinct. What is the spending threshold for officially describing one of our centres as having been “redeveloped?”

7. (asked 11th) When was Catherine Brenner's last day as a full-time executive before she embarked on a professional director career and can she comment on whether she has regrets about her stint on the AMP board. Also, could Catherine comment on which of the current Scentre Group directors she knew before being appointed to the board. Could the chair comment on whether a recruitment firm was used to secure our newest directors and how many candidates were on the short list?

8. (asked 5th) In terms of board diversity, once Steve Leigh departs we are going to have a board entirely comprising Sydney-based directors with the exception of our token Kiwi, Andrew Harmos. What are we doing to improve board geographic diversity, particularly given we have 7 Victorian centres and 6 centres in Queensland? Could both candidate Mike Ihlean and the chair comment on whether geographic diversity on boards is important, in their experience.

9. (asked 10th) Gerry Harvey continues to bad mouth Westfield all over town claiming that he would go broke if was required to pay our exorbitant rents. Do we have any Harvey Norman stories in our 42 centres and what are we doing to improve relations with this powerful billionaire who is very influential in the Australian public debate and is a major critic of shopping centre landlords? Should we make it a KPI of the new CEO to recruit the biggest Australian retailer which is not currently working meaningfully with us, to join the Westfield family?

10. (asked 7th) It still makes no sense that Westfield is not included in the name of this company. It was Frank Lowy who insisted on this back in 2014. What legal processes, commercial agreements and shareholder approvals would be required to change the name from Scentre Group to Westfield Australasia? If a shareholder resolution proposed such a change by way of constitutional amendment without board approval, would it be enforceable if supported by the requisite 75% super majority of voted stock. What does board candidate Ilana Atlas think about this proposal.

11. (asked 13th) Treasury Wine Estates has voluntarily moved to annual elections for directors in line with best practice that occurs in both the US and the UK. Dual listed companies like News Corp and Rio Tinto all do this due to the laws in the US and UK and BHP has pledged to continue doing it even after its UK DLC ended last year. Can Ilana Atlas and the chair comment on whether they would support Scentre Group following this TWE lead and moving to annual elections of directors at the 2023 AGM?

12. (asked 4th) As a former fighter pilot in the Australian Air Force, could Peter comment on why he believes the Russian air force hasn't been able to secure air superiority over Ukraine. Also, what are Peter's plans on retiring from Westfield after an excellent run with the company? Will he retain a long term shareholding and is he planning to become a professional director, pursue private business interests, work with not for profits, return to the Defence industry, or a combination of the above. What formal mechanism or incentives are in place to prevent Peter joining the board of Vicinity Centres in the coming 2-3 years?

Watch video via Twitter of chair butchering the question and Peter Allen briefly responding.

13. (asked 3rd) 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? Ilana Atlas is an ANZ director and it agreed to publish a full transcript of its 2021 AGM after a similar request last year. Transparent companies like Insurance Australian Group, which used to be chaired by our chair, are currently publishing AGM transcripts all the way back to 2003. Will you commit to publishing a transcript from today, plus a back catalogue of AGM transcripts so investors can access a full history of debate at the most important governance meeting of the year, particularly for retail investors. The likes of Afterpay, AGL Energy, ASX, CIMIC, Domino's, Freedom Foods, Lend Lease, Mineral Resources, Mirvac & Nine all produced their 1st AGM transcripts last year. Will Scentre Group follow suit today in order to be as transparent?

14. (asked 14th) Last question: Solomon Lew has been a vocal critic of landlords and famously refused to pay the rent during the pandemic. Has our relationship with Premier Investments been normalised after this out-break of hostilities and was there any formal mediation or litigation to resolve the dispute. Did the fact that Premier Investments outrageously claimed $71 million in Jobkeeper from the Federal Government assist with its ability to keep paying the contractual rent owing to Scentre Group as the Premier share price boomed during the pandemic. Is Premier Investments and the wider Solly Lew empire in our top 10 commercial tenants?