A Brisbane-based Crikey subscriber went along to her first ever AGM on Friday and watched chairman James Strong oversee another unnecessary options gift to CEO Roger Corbett and the board raise the bar so that Woolworths has now got the highest bar to be cleared for outsiders running for their board.
The most exciting part of the morning happened first up when chairman Strong’s large trademark bowtie in bright red clashed wildly with the immense and puzzling posters of firm, orange carrots decorating the plaza ballroom and covering the annual report. Woolies AGM
As it was my first AGM I arrived early and sought comments from whoever was close enough to survey on a special business item to give CEO Roger Corbett 1 million share options at $7.84. The mood was at best feisty, at worse grumpy. Shareholders were voting for it as they were happy with their annual result but were not happy, particularly as he was reputed to already be $13 million in front.
I dutifully recorded comments like they shouldn’t do this to us, I wish I had the gall to give them a piece of my mind, snouts in the trough and one lovely lady said she wouldn’t mind so much if only he would donate it to charity. Another lady leaned over and said hopefully perhaps he already had and was too honourable to say so publicly.
I didn’t have a proxy but managed to walk past the many smiling Woolies attendants who had obviously been warmed up as they all chose exactly the same greeting and eerily the same smile.
It was pretty easy for this novice Crikey subscriber to spot the hotbed of discontent in the corner. George Bissel, Director of the Australian Shareholders Association was organising his questions with a few likely lads and when I mentioned Stephen Mayne they welcomed me like a long lost cousin, pressed a yellow proxy into my hand, and told me what they were going to get up to.
Strong was a warm Chairman, and gave considered responses to some very detailed questions over the financial statements. George Bissel then asked if it was the case that in the previous year just on 100 people had salary packages of over $100,000 and why it had tripled to 300 this year.
The board election turned into a farce when the two Malaysian nationals who had nominated were a no show. They had no proxy, not a single person from the crowd would nominate them so Strong nominated each of them to put it to a vote. There were no speeches from them to read out and not a single person from the audience voted for them. Professor Adrienne Clark and Diane Grady easily got their next terms with votes of 99.5% and 99.4% already plugged into the powerpoint presentation before the board members sat down.
Special business item 10.8 was to amend the constitution so that a board candidate must own at least 5,000 shares and the board could unilaterally declare there was no vacancy for outsiders. My question went along these lines: “Mr Strong, I am covering this for Crikey. You said in your speech earlier that you were proud that 90% of Woolies shareholders had less than 5,000 shares. Are you saying 90% of your shareholders aren’t fit to run for the board? Isn’t this exclusive or even discriminatory behaviour and have you had a legal opinion specifically on this constitutional change?”
Strong said he thought he would get something from Crikey at some stage in the meeting and then reassured the audience that everyone had something to give and he wasn’t saying that at all. No they just had to find a token number and that was the number they chose. It just so happened that this number excluded 90% of the club. They didn’t have a specific legal opinion but their lawyers had looked at the constitutional changes and hadn’t raised anything and Strong as a lawyer couldn’t see a problem. A couple of other audience people followed the theme, but concern was well in the minority. Needing a vote of 75% the board squeaked it through with 82%. Only about 18 people in the crowd raised their hands on the no vote.
(CRIKEY: However, the board used the undirected open proxies last year to get Stephen Mayne’s primary vote down from 58 per cent to about about 45 per cent and therefore saw off his challenge. If all of the open proxies had been voted against this resolution to shut the door on outside candides, it would have failed. The primary vote was only 81.45 per cent in favour and if they’d voted open proxies in the same way they used them against me last year, it would have fallen to 72.82 per cent and missed the necessary 75 per cent approval rate required. This is a classic example of how the club can use open proxies to get what they want, even though the dopey shareholders who just sign the form and stick it in the reply paid envelopes often have no idea they are giving their votes to the chairman to use like this.)
On the matter of the nice little share package for Mr Corbett, there was some feisty questioning about the Board approving it on 8 December last year. One shareholder demanded to know why it wasn’t in the interim report and why the board signed off on this as part of his contract renewal before taking it to the shareholders.
I pointed out that he was $13 million ahead already and didn’t these sorts of share packages give companies a bad name? Strong took exception to the use of the term snout in the trough when I repeated some of the comments I had collected on the way in, though a number of people whispered good on you luv on the way back to my seat. Strong said that the board had to offer that sort of incentive as a matter of ‘urgency’ to keep someone as good as Mr Corbett there.
The Australian Shareholders Association put Strong through his paces but he was easily able to justify it to the satisfaction of most of the audience. The nod before the meeting was 84.4% and the clear majority of people in the room voted to reward Mr Corbett for his work. About 30 people voted against it to add to the 15.6% of prior frowns.
The meeting ended after nearly 3 hours and Strong congratulated the audience for what he reassuringly said was the most intelligent questioning he had ever seen at an annual meeting.
Just one thing Crikey. The two guys who ran unsuccessfully for the board did get pre poll votes of 2.7% and 2.1%. Isn’t that better than some of your attempts lately? Perhaps the trick is the no show.
(Crikey: how does that compare with my 58 per cent primary vote last year? The key difference was the ballot paper said in bold that the Malaysians were not endorsed by the board so they did not get the donkey vote from foreign institutions that I got last year.)
The shareholders left happy and why not? The share price has almost doubled in a year and the refreshments outside were tables of muffins rather than the very large carrots we had been faced with all morning.
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