Southern Cross Broadcasting have cynically waited until after the Federal election to axe 60 jobs in regional news rooms which is incredibly hypocritical given the way directors have tried to get their snouts in the trough recently.
And how cynical was it to wait until 10 days after the federal election to strip key regional centres such as Cairns, Townsville, Alice Springs, Darwin and Canberra of their local news services.
The Howard Government partly owes their return to the right wing radio broadcasters that Southern Cross encourages with Alan Jones the leader of the pack.
Afterall, former National Party minister Peter Nixon was chairman until a couple of years ago. CEO Tony “Slasher” Bell is now famous for his cost-cutting.
He agreed to pay $96 million for Channel Nine in Adelaide and then halved the local staff. Similarly, on buying 2UE earlier this year he pared the staff back from about 130 to 80 so it matches the manning levels at 3AW in Melbourne.
But slashing these regional jobs should raise question marks about whether Southern Cross should get an estimated $4 million a year in licence rebates to pay for conversion to digital.
Australia’s corporate sector has performed terribly in recent years with those companies holding lucrative government licences in banking, gambling and media being some of the few exceptions.
But with directors putting their snouts in the trough and the share price soaring, it is time for the politicians to start flexing their muscles. If Southern Cross Broadcasting won’t provide news services in the bush they should give the licences to someone who will do it.
Enough on this for now, this is the report we posted two weeks ago about Crikey’s tilt for the Southern Cross Broadcasting board. I can assure you that this decision to slash news jobs would not have had unanimous board support had I been elected.
For subscribers, there are also tonnes of stories in our searchable archive about Southern Cross Broadcasting.
Snouts in the Southern Cross trough
By Stephen Mayne
Oh well, another board tilt and another single digit result.
Crikey received only 857,418 votes in favour of his nomination for the board of Southern Cross Broadcasting this morning and the no vote was 21 million, so our primary vote in favour was only 4.1 per cent. Oh well, this one would have been a $165,000 three-year sinecure.
But there was a major victory for shareholders because the board were mightily embarrassed by the withdrawal of the resolution boosting their retirement payouts.
So embarrassed in fact that this was the ASX announcement that went out at 5.51pm last Friday night:
“The Chairman of Southern Cross Broadcasting (Australia) Limited, Mr Geoffrey Crawford-Fish announced that the directors have decided that the business agenda item relating to increasing the Directors’ Retirement Allowances will not be moved as a resolution at the forthcoming Annual General Meeting.
In reviewing the situation, directors decided that in the current environment it was appropriate to consult further with shareholders and advisers.”
So there you have it. Rather than getting rolled by the proxies, they snuck out an announcement to the ASX when no-one would notice. Presumably the three largest shareholders, Deutsche Bank, Perpetual and the Commonwealth Bank had threatened to vote it down.
It really was one of the most scandalous snout in trough exercises I’ve seen for a while.
The remuneration committee comprises chairman Geoffrey Crawford-Fish and company founder John Dahlsen, both of whom are in their late 60s and approaching retirement.
The new retirement package would have seen these two old boys pick up a lump sums equivalent to 5-times their annual fees because they had both served more than eight years on the board.
Even worse was the proposal to increase the maximum payable to non-executive directors from $400,000 to $600,000, which got through relatively comfortably.
Chairman Crawford-Fish took over the reins in March 2000 and saw his annual fees soar from only $57,585 in 1999-2000 to $128,000 in 2000-2001, and presumably is now going to get another increase.
Based on the new retirement deal, he was nominating himself for a package worth $640,000 – and that’s assuming no increase now that the NED maximum has been lifted to $600,000.
Based on the way he stuttered and stammered his way through the meeting and refused to answer questions properly, this former liquidator has to rate as one of the worst chairs of an AGM I’ve ever seen.
And the Fish has some baggage. He was the liquidator who decided to finish the Twin Waters resort near Noosa when Tricontinental’s exposure was only $25 million. It has now turned into the second biggest single bad debt disaster for Trico with losses easily topping $100 million. As liquidator, the Fish should have walked away from the project leaving a great big hole in the ground.
And when I asked the question about why the related party transactions between John Dahlsen and legal firm Corrs Chambers Westgarth weren’t mentioned, the Fish claimed the former long-time partner of Corrs was no longer a consultant to the firm.
That’s funny, Crikey rang the Corrs switchboard after the meeting and asked if John Dahlsen still worked there.
“Yes, he’s a consultant to the corporate advisory division,” the receptionist replied.
Presumably he picks up handy consultancy fees whenever Corrs does the legal work on big deals such as the recent $260 million merger with Telecasters Australia.
For the record, it should be disclosed that Corrs are acting for 3AW program director Steve Price in both a defamation and contempt of court action against Crikey Media and me personally.
After the meeting, Dahlsen wondered over with a puzzled expression on his face and asked: “what are you so angry about? The company is performing outstandingly.”
I think he was serious and explained that I had a long track record of opposing cash for comment such that I was concerned about how the company was making it’s money as well as the amount it was making.
During the meeting, The Fish responded to my speech opposing cash for comment at 2UE by reading from a letter the Australian Broadcasting Authority had supplied that morning confirming that the ABA was not presently investigating anything to do with cash for comment or Southern Cross Broadcasting.
So, clearly they think it is okay for the Penrith Panthers Leagues Club to pay John Laws a six-figure sum each year and for Laws to go soft on the gambling industry, despite the fact NSW has more poker machines per head than any other jurisdiction in the world apart from Nevada.
Southern Cross are to be commended for not unilaterally declaring that there was no vacancy on the board, but what about the way those institutions voted heavily against Crikey and then gave Marina Darling, another ex Corrs person, a yes vote of 99.9 per cent.
Do all of these dopey institutions forget that Marina was one of the GIO directors who cost shareholders more than $1 billion when its reinsurance book exploded. The Fish refused to comment on this saying it was sub judice.
Do they forget that she was one of the directors who recommended against the $5.35 a share takeover from AMP and is now being sued in a class action after the GIO share price subsequently plunged to about $2.50 as the reinsurance disaster became public?
Institutions seem increasingly willing to tackle the pay of directors – witness the surprisingly high 28.4 per cent no vote on the resolution issuing another 200,000 options to CEO Tony Bell – but just can’t bring themselves to actually oppose the re-election of a director.
Given the scandalous nature of the retirement packages put up, the shareholders should have voted against the directors up for re-election as a further protest.
Then again, the company has been a spectacular financial success and is forecasting record profits of $37 million this year.
The snouts in the trough for directors, surging profit and rising share price make it ludicrous that 3AW is demanding to pay even less for the right to broadcast AFL football next year.
The AFL should stick to their guns and demand a much bigger fee as 3AW would instantly tumble down the ratings survey if they lost the football. One of the reasons that 3AW is the most profitable station in the country is the cheap price it pays for football rights. This is all about to change.
Directors with skeletons who win landslide re-election
Now, here is a list of directors with skeletons in their closets who should be getting much lower votes from institutional shareholders than they do:
Maree Callaghan: this civil celebrant is a Labor Party hack and the former mayor of Cessnock who just should not be on the NRMA Insurance Group Ltd board but last year she somehow received 243.1 million shares in favour and only 9.92 million against, a yes vote of 95.4%.
Ken Cowley: He was responsible for Super League and helped send Qantas NZ and PMP into the abyss but Rupert’s discredited long-time Aussie lieutenant still got 1209 million shares in favour and only 1.72 million against at this year’s AGM, a yes vote of 99.9 per cent.
David Crawford: the longest serving BHP director should have suffered for his role in the $7 billion written off since he joined the board in 1994. Instead, he was recently re-elected with 811.25 million shares in favour and 19.24 million against, a yes vote of 97.7 per cent.
Tony Daniels: The former Tubemakers CEO has the triumvirate of duds in Pacific Dunlop, Pasminco and Orica and last year he got another 3 years on Orica with 50.19 million shares in favour and only 2.43 million against, a yes vote of 95.4 per cent.
Marina Darling: despite being one of the GIO directors who resided over the $1 billion loss and is currently embroiled in a class action, Marina was voted back onto the Southern Cross Broadcasting board with 20.53 million shares in favour and only
Ian Webber: Despite sitting on the Pacific Dunlop board since 1991, shareholders recently gave him another 3 years with 211.9 million votes in favour and only 6.47 million against, a yes vote of 96.95 per cent.
Nick Whitlam: After truckloads of information came out about how dodgy and destructive Nick Whitlam was as chairman of the NRMA, the shareholders of NRMA Insurance Group Ltd last year still voted 228.06 million shares in favour and only 23.21 million against, a yes vote of 90.77 per cent. ASIC subsequently took civil action against him for this and is trying to have him banned as a director.
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