Former Aristocrat chairman John Ducker will probably become the first member of the directors’ club voted off a major public company board against the wishes of his colleagues. Read some of our sealed section material and an excellent spray from Michael Pascoe on Sunday Sunrise last week.

Like everyone else, Crikey is amazed at the greed and pig-headedness of former Aristocrat chairman John “Bruvva” Ducker. He really is giving the Labor’s Party’s incestuous links with Australia’s gigantic gaming industry a bad name.

It was this letter to Aristocrat shareholders earlier this week which has everyone up in arms.

ASX announcement – Director’s Retirement Allowance/Re-Election of John Ducker
http://www.asx.com.au/asxpdf/20040316/pdf/3l03lhck5hnnb.pdf

The idea that Ducker gets his $560,000 retirement payment even if he gets thrown off the board and doesn’t satisfy the 5-years of service requirement is surely a breach of the law. Shareholders approved the Aristocrat directors’ retirement scheme and surely it is illegal for a company to commit to additional benefits not approved by shareholders.

The scheme says you must serve 5 years. How can a non-executive director receive a benefit not approved by shareholders? If Aristocrat makes the payment, shareholders should consider personally suing the directors who agreed to the deal for the full amount. That would make them sit up and take notice.

Here is some of the other commentary and reports on this emerging scandal:

SMH – Elizabeth Knight – Like water off an ex-chairman’s back
http://www.smh.com.au/articles/2004/03/17/1079199292834.html

SMH – Colin Kruger – Ducker digs in heels at Aristocrat
http://www.smh.com.au/articles/2004/03/17/1079199292761.html

Las Vegas Sun – Bloomberg – Aristocrat director to profit by leaving
http://www.lasvegassun.com/sunbin/stories/gaming/2004/mar/17/516542344.html

Michael Pascoe’s Ducker spray

Sunday Sunrise business presenter Michael Pascoe said just what we think about Ducker last weekend with this hard-hitting spray:

Consider this hypothetical scenario for a moment:

You’re 71 years old and whatever Peter Costello says about working till you drop, your most productive income earning days are probably behind you.

For a start those couple of hip replacements you had done last century are creaking a bit, ruling out much in the way of physical labor. Nevertheless you’ve made a comfortable living over the past few decades, mainly from jobs given out by old political allies – or from the sort of people who hoped you could help in dealing with those former comrades.

But there are signs that lucrative source is drying up. Well, you are 71 and there’s a whole new generation of mates who need looking after. And there’s another little problem. Frankly, you’ve become a bit of embarrassment.

Your last big job blew up in your face. On your watch, or, perhaps lack of watch, billions of dollars of shareholders funds were wiped out. Very embarrassing. So embarrassing in fact that you told everyone you would resign, accepting responsibility for the disaster.

But now there’s a bag with $577,000 in it, just sitting on the table in front of you, and all you have to do to get your hands on it, is say you’ve changed your mind about resigning.

Well, what would you do? Hmm?

I think I know some people who would keep their word and walk away from the money, but I think I know plenty of others who’d take the cash with barely a second thought. One of them is ex-Aristrocrat Leisure chairman, John Ducker, or Bruvver Ducker, as he’s been dubbed from his career as a trade unionist and New South Wales Labor Party heavy.

“To have a faith, to have some signposts in life, makes an enormous difference in being able to make the right choices.”

Question: Was there any particular incident while secretary of the Labor Council where your faith really helped?

“I think the dismissal of Mr Whitlam tested me to the limit. It was so wrong. I did need a rock to cling to and to survive and do the work I was involved.”

That was Bruvver Ducker in 1986, when he had the sinecure of Public Service Board chairman, talking about his Catholic faith. We trust the rock he clings to remains strong enough to support him and the half million.

But Ducker has displayed limpet-like qualities before, holding on to a prized Qantas directorship for 17 years.

The problem is, it’s actually rather difficult to get rid of a director if he or she doesn’t want to go.

Unless they’ve done something positively illegal – and been caught – and been convicted – and you don’t land a trifecta often – only the
shareholders can sack directors. And that’s probably what Bruvver Ducker is relying on.

Ducker is seeking re-election as a director of Aristocrat . If the shareholders decide they don’t want him, he cops the $577,000 as a
termination payment under the terms of his original engagement.

If by some unbelievable stretch of the imagination shareholders do re-elect him, Ducker one month later will have been on the board for five years, and from that moment he gets the same sort of money as a resignation benefit whenever he wants to retire. Plus, of course, he’ll continue to pick up the usual fat directors fees. The man really can’t lose.

In disclosing that outrageous termination payment last week, the new Aristocrat chairman, John Pascoe – no relation – blundered by saying he believed the timing of Ducker’s retirement as a director was a matter for Ducker and the shareholders.

Well, no – it also can be a matter for a good chairman to provide leadership by declaring how he will vote his own shares and the many open proxies shareholders routinely give him.

I understand the matter of those proxies will be on the agenda at the Aristocrat board meeting being held in Tokyo next month. Given Aristocrat’s history, it is unthinkable that the chairman will do anything other than vote against Ducker’s re-election.

But then again, given Aristrocrat’s history, I suppose anything is possible.

Peter Fray

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