Alan Stockdale is one of Australia’s richest politicians and it’s not just because of his life-time pension. There is the smaller matter of $2.3 million made chairing a rendering company called Symex. Hugo Kelly was at the first AGM for Crikey.
And when it came to the business of using his connections gained as an elected representative to line his pockets in the corporate world, Stockers has once again handsomely outdone Jeffrey.
Stockdale has been very busy since accepting his state-funded pension for life. His first move was as gamekeeper-turned-poacher, joining the merchant banking millionaire factory, Macquarie Bank, as chairman of its assets and infrastructure division. The same division that took multimillions in fees during Stockers’ privatisation of Victoria’s utilities, creations of huge tollroads and issuing of lucrative gambling licences.
Then he became chairman of two very different companies: Axon Instruments, a California-based drugs and medical software developer; and a company called Symex, which runs a rendering factory in Port Melbourne.
Jeff, meanwhile, was attracted by the bright lights and glittering promise of The New Economy. He carefully picked a handful of bold chimerical ventures, waded in to provide his experience, connections and strategic vision – and watched as they turned to dogs and barked their way loudly towards corporate oblivion.
He stood down last year as chairman of the ultra-cool web community, Tribe, as its shares plummeted, staff were sacked and services shut down. He remains chairman of software group SofCom, which has blown $11 million of shareholder funds in 12 months while falling from a float price of 35 cents to one fifth of that. It has been a bumpy road to corporate wisdom for Jeff.
Stockers has stuck to more earthy ventures. Last Thursday, he chaired the inaugural AGM of Symex the renderers.
Rendering, gentle subscribers will know, is the process of tearing open animals and melting them down to produce various useful consumables like candles and glycerine – all done, of course, most humanely.
Naturally, the company’s glossy annual report avoids any description of this messy core business – managing director Michael Newton simply writes in his review to shareholders that the company “will continue to focus its strengths in tallow based Oleo Products”. That’s Oleos, not those tasty American biscuit treats, Oreos.
The company goes back nearly 150 years, based on the old Kitchen candle-making business established in Melbourne in the 1850s. Kitchens became Lever & Kitchen, then Unilever, then Uniqema – a subsidiary of ICI.
Symex and its tallow has been good to Stockers. Management brought him in last year as chairman – non-executive chairman – after acquiring the business from ICI in an MBO. He picked up two million options exercisable at the 50 cent public offer price when Symex listed last August.
With shares now worth around $1.60, you’d think Stockers would be satisfied with his windfall. Surely a paper profit of $2.3 million is sufficient reward for 18 months hard work – after all, according to the annual report, he has attended four out of the five board meetings held during the year.
But, no! The board has insisted that he needs more. So one of the two resolutions at Thursday’s AGM was to give Stockers another 500,000 options, exercisable at $2, $2.25 and $2.50 in equal tranches.
We felt the ongoing generosity of the options package needed a little explanation – particularly given Stockers is a non-executive chairman, and he’s taking a $50,000 salary for his trouble. And we arrived at the meeting ready to fire a couple of questions to the board. Unfortunately, there was a mix-up with our proxies, and the registry people would only give us a visitors’ card – and then kept a close eye on us during proceedings to ensure we didn’t slip in a sneaky question or two.
Fortunately, we weren’t the only ones with questions. One shareholder felt the pricing of the options handout seemed arbitrary. What, he wanted to know, if the share price was $3 – or even $4 in 12 months? MD Mike Newton replied that he’d left his crystal ball at home: “Everything’s easy in hindsight. If our share price is $3 in 12 months time everyone will be happy. I for one would be ecstatic.”
He supported the options “very, very strongly”. “Alan has added considerable value to the company, and we are awarding these shares as recognition of that value,” said the loyal MD. “He’s been a tremendous support to me. He’s guided us through some pretty sticky situations.”
Apparently satisfied, shareholders waved through Stockers’ next big payday, and we moved to general business.
Now it was Stockers’ turn to lay on the praise. A shareholder wanted to know what competition the company faced in its field. Stockdale replied: “I’ll ask Mike to answer your question, because what Mike doesn’t know about this business you could write on the back of a stamp and still print the Bible.”
And it didn’t stop there. Alan was in full swing, lauding the MD for his “strategic vision”, and for engendering “the pride everyone has of being part of the Symex team.” It’s good to see Stockers & Mike seem to get on even better than Stockers & Jeff.
At board level, the Symex team is an interesting mix. Apart from Stockers and MD Mike Newton, a 25 year Symex veteran, there’s a surprising lack of corporate experience. The three other board members are all under 40. These include 34 year old marketing director Allister Tomkins and 38 year old finance director Greg Tremewen. And as Age business gossip columnist, Chris Webb, pointed out on Friday, 35 year old corporate advisor, Mark Evans, a non-executive director, appears to be spending time scoping out potential takeover targets.
Just over a year old, it seems the company is already on the lookout for acquisitions. Stockers said it had run the ruler over a range of potential targets here and overseas.
The expansion plans didn’t re-assure everyone. One shareholder wasn’t convinced: “Are you talking about a takeover target that offers horizontal or vertical integration? I can’t imagine what sort of business would be compatible…”
Stockers assured him any takeover target would complement the company’s business and its skills. “We have surveyed every likely prospect in Australia and some overseas. We’re looking for a complementary business, particularly in terms of our distribution network.”
Another shareholder wanted to know whether Symex itself was not a takeover target. Stockers replied: “Takeover targets usually have lazy balance sheets. This company is working its assets very effectively, exports 70% of its output on to the world market and is managed very well….We’d be a pretty expensive takeover target for somebody.”
When it was over, maybe Alan believed he’d gone some way towards earning his options. “We do seem to get a lot of interesting questions at our meetings,” he told everyone. “Most of the AGMs I attend are a bit like watching grass grow.”
We will continue to watch Stockers with interest.
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