As usual, the media failed to look at the election results coming out of the Telstra AGM.
Proving my ever increasing unpopularity with shareholders, I came stone motherless last Friday in a field of 11 candidates hoping to join the Telstra the board for the next three years.
And it was not as if the competition was all that tough as I got beaten by a former pizza delivery man, a civil celebrant, a union heavyweight and two Telstra employees, all of whom also fell well short of the mark.
The best way to look at the vote is to strip out the government’s 6.64 billion shares because it was interesting that the government voted at the meeting, rather than by proxy.
An examination of the proxies proves very interesting. To start with, only 25 per cent of the freely floating shares were voted, which is well below the average of about 35 per cent and reflects the perception that there is no point because the government controls everything that happens at Telstra.
It is very curious that the farmer representative and government crony Donald McGauchie proved the most popular with 96.86 per cent of the primary vote and the board-backed US military man William Owens set a record for opposition at a time when we’re all meant to be madly supportive of the US.
Owens is a former vice-chairman of the US joint chiefs of staff and was also a Commander of the US Sixth Fleet. But he’s on the Telstra board for his internet, IT, and telco experience in the US which appeared to count for nothing because he only polled 58.9 per cent of the primary primary vote, the lowest ever for a major company incumbent in Australia.
As usual, the business press have completely missed this because there is no culture of looking at the results of corporate elections.
I have never seen an endorsed director slump to that low a vote and the explanation is probably that the notice of meeting did not make it clear he was an incumbent. The same applied to new director Charles Macek who came fourth of the five government-backed candidates but only got 79.1 per cent of the primary vote.
Incumbents rarely get below 95 per cent of the vote and the notice of meeting also failed to point out that Belinda Hutchinson was backed by the board and government which might explain her unusually low primary vote of 82.14 per cent.
Anyway, this is the league ladder as to how they finished and what a wide range we have between that Howard stooge McGauchie and Crikey.
1. Donald McGauchie: 1.35bn versus 44m for a yes percentage of 96.86%
2. Dr John Stocker: 1.32bn versus 75.6m for a percentage 94.3%
3. Belinda Hutchinson: 1.16bn versus 253m for a yes percentage of 82.14%
4. Charles Macek: 1.07bn versus 283m for a yes percentage of 79.1%
5. William Owens: 824m verses 574.7m for a yes percentage of 58.9%.
6. Peter Strohkorb: 214.53m versus 1.03bn for a yes percentage of 17.1%
7. Len Cooper: 166m versus 1.12bn for a yes percentage of 12.89%
8. Ange Kenos: 109m in favour vs 1.09bn for a yes percentage of 9.06%
9. Merv Vogt: 89.4m versus 1.1bn for a yes percentage of 7.5%
10. Edvard Pregun: 82m versus 1.16bn for a yes percentage of 6.6%
11. Stephen “loser” Mayne 59.28m vs 1.185bn for a yes percentage of 4.76%
The percentages blow out even further if you include the government’s shares because they voted in favour of the top 5 and against the bottom six, abusing their position as 50.1 per cent shareholder by effectively appointing 100 per cent of the directors. Sadly, the Government’s 50.1 per cent block sends Crikey down to just 0.7 per cent which is almost as bad as the 0.6 per cent I got when running for the Westfield Holdings board last year.
I wasn’t actually at the meeting but this letter to the Fin Review summarises what happened very well.
Great letter to the Fin Review
By Clay Turner
Telstra shareholder from Ourimbah, NSW
I attended the annual general meeting of Telstra Corp last Friday. Departing from usual practice, immediately subsequent to the presentation of the chairman and CEO reports, the chairman – against the wishes of the meeting – gagged any discussion thereon. This action immensely angered the meeting.
The chairman called for a poll for the election of retiring directors, knowing full well that the result was a foregone conclusion due to the proxies that were held by the board. He then successfully lured more than half the shareholders from the meeting (who did not return) by offering them lunch, while the poll procedural fiasco progressed. This reduced the number of shareholders available for question time after the presentation of the financial reports.
The meeting called for the existing directors standing for election to stand and identify themselves and hopefully state what they could contribute to the company. No director was prepared to do this. They just sat in their chairs like a bunch of mute morons for the whole meeting.
In my opinion, this sent a clear message to the meeting of the arrogance and hypocrisy that they confer on shareholders. They don’t want to recognise that they are the representatives of shareholders and are accoutable to them.
It’s unbelievable how the board can increase significantly the salary of the CEO and give him full support after has lost billions on numerous flippant and ill-conceived investments.
To make matters worse, some of these losses are hidden in the accounts by a mechanism of financial smoke-and-mirror technology.
The board treats the small shareholder with contempt and disdain.
In my opinion, the only way that this company will ever gain the respect of the major fund managers which it has now lost, the general investment community and all shareholders, is to have radical surgery on the board’s composition and to fire the chief executive immediately.
Now that the federal election is over, one can only hope that the controlling shareholder, the Federal Government, will take some positive action to remedy the company’s woeful position in order to add wealth to its controlling shareholding and to all other shareholders, instead of listening to the pipedreams, fairy tales and fantasies which were dished up to the meeting by the board.
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