Mayne’s Chairman Mark Rayner is asked to account for the companies actions by Crikey’s Mayne shareholder advocate.
It’s the company with the big red dot, but health and logistics conglomerate Mayne admitted yesterday that its rebranding exercise has been less than a triumph, during an AGM in which the company’s outgoing Chairman Mark Rayner charted some rocky territory.
His task was to account for an erratic performance over the past year.
First, Rayner introduced his board to the sharholders at the Melbourne Concert Hall with a brief bio, which didn’t exactly calm investors’ nerves. Rayner and Bennett are both on the Pasminco board (now in voluntary administration), Stuart James, Carolyn Kay and Peter Smedley are all Colonial people, with James and Smedley also sporting time at Shell Australia (and Shell International for James) on their resumes.
Crikey was present at question time to ask the Chairman about the diversity of Mayne’s Colonial clique of board members, the sale of Mayne Logistics to Toll (a very successful logistics company founded by ex-Mayne Nickless managers Paul Little and Peter Rowsthorn), and whether Mayne would be continuing to provide large lump sum retirement payments to outgoing non-executive directors.
“Ah, Mr Mayne,” said the Chairman, “it wouldn’t be a Mayne meeting without Stephen Mayne.”
Rayner said he had a very well balanced management team with both Colonial and Mayne people. In reference to Toll, and the success the old Mayne Nickless middle managers had had in their new venture, he said “it all happened before any of us were on the board,” and that they were not responsible for decisions made in the 1980s.
Rayner also passed on the responsibility for answering Crikey’s question on the retirement allowance saying incoming chairman Peter Willcox might tackle this one next year.
In other business, several board members were retiring by rotation and offered themselves for re-election. Peter Mason is the longest serving director with 10 years under his belt, but his election passed without comment. Professor Judith Sloan, however, was not so lucky with her nomination attracting a challenge from two shareholders
The first objector said the structure of the board was too narrow in its experience. He wanted to send a message to the board by encouraging shareholders to vote against Sloan. But one wonders why he waited for Sloan’s re-election rather than bringing it up straight away with Mason’s if it was merely a matter of principal.
The second objector was more to the point and said he did not think Sloan had made a great contribution to Mayne and that, since the company had divested itself of its logistics interests, the board could also be smaller.
Nevertheless, Sloan’s re-election was passed comfortably, with only about 10 per cent of the room voting against it. Mason was less popular on the proxies with 5.9 million against compared with Sloan’s 4.12 million.
The question of the CEO Stuart James’ remuneration package was also queried by a shareholder unhappy with the performance hurdles set, given the company is embarking on a $300 million share buy which could be topped up again next year after the $456 million is banked from the logistics/security sale. It was passed with 244 million proxies in favour and a hefty 46.7 million against.
James is still coming out of the shadow of Pacman Peter Smedley who was mentioned plenty of times given the stuff-up in the hospitals business and the aborted move to make him Mayne chairman.
Smedley retired at the end of August this year. Rayner said that with the long term strategic direction of Mayne now clearly focussed on the growth of the health business, and with Smedley’s contract due to run out in December, he had decided to leave the group.
In a departure from the procession of questions coming from members of the Austrlaian Shareholders Association, a pharmacist took the stand to ask the board why there were no doctors or other medical practitioners on the board. This is an omission which has become even more stark now that Mayne have positoned themseleves squarely in the health sector. Rayner said that they did have a medical advisory council which provided Mayne with advice on Medical issues. “It is not that we are without doctors,” said Raynor, but it was not something Mayne would rule out either, in terms of bringing medical expertise into the board room.
Another interesting element was the acknowledgment that the loud rebranding of Mayne with the big red dot had annoyed a lot of players in the medical game. Rayner pointed out that recent acquisitions had not been rebranded and James confessed after the meeting that the Carlton jumper may carry an alternative brand next year such as Cernovis.
Whilst Smedley admitted he barracked for Carlton, James would not fess up where his allegiances lie other than that they weren’t with Carlton. He was keen to point out that Mayne would honour the remaining year of their three year agreement with Carlton, however, after that time they would have to access whether a continued relationship would be beneficial for both Mayne and Carlton.
Although he would not comment decisively on what from the rebranding would take, he said that it would not be very extensive and it would be progressive.