Veteran journalist Glenn Dyer attended the John Fairfax AGM on Crikey’s behalf and filed this excellent summary of the key issues raised.

It takes a lot, even for experienced journalists, to ask questions in public forums of powerful people. It especially takes guts as an employee to tackle your board, CEO and expose your self up to your managers. That’s what happened today when Anne Davies, a Gold Walkley winning reporter on the Sydney Morning Herald (with Kate McClymont), got up at the John Fairfax annual meeting to ask a question.

And the questions were not easy, they were about the apparent discrimination against a group of senior editorial employees at Fairfax’s Sydney metro publishing business. Her questioning of the board further confirmed reports that at meeting of senior editorial executives last week there was talk of a $10 million cut being sought in staff costs over the rest of the year.

It turned out to be two questions from Ms Davies. And the answers she gained also revealed that the Fairfax board and Fred Hilmer are planning more staff cuts in the Australian publishing businesses and changes in the coming years, even after Fred quits next year.

Davies told the annual meeting that she had been a shareholder for five years and an employee for 18 years (SMH and AFR). She said she had been asked to attend the meeting and ask questions by staff at the company’s Sydney papers.

Her partner is Tom Burton, a senior executive on the SMH and union heavyweight. It takes a lot of guts to do what Anne Davies did and it’s to be strongly hoped she will not be discriminated against by Fairfax management as a result. She was exercising her right as a shareholder who happens to be a journalist employee.

Davies asked why some employees, mainly managers, had been paid bonuses for the latest financial year, and others had not. She also said that in the negotiations in late 2003, the journalists had been assured by management there would be no retrenchments. She said there were 40 staff cut (all J-10 grade and above) in May of this year.

As background both she (and CEO Fred Hilmer in his reply) revealed that the last industrial agreement with journalists revealed that those in Sydney on a J-10 level or higher, had reached agreement on a pay structure that included a pay rise to cover cost of living, a performance or merit component, and thirdly a bonus based on the Australian publishing businesses achieving certain targets.

Younger journalists, most of whom who are under the J-10 level, will receive a three per cent rise. Davies said the cost of living increase had been paid, as were merit payments. But last week Sydney staff were told that they would not be getting a bonus because the targets on revenue and costs had not been met. (The pay rise was only 1%. With inflation between 2% and 3%, that is an effective pay cut.)

She asked whether it was morally right for staff to be denied bonuses when managers were paid bonuses? In reply Hilmer told shareholders that the managers in Australian publishing had not got bonuses for that business, because of the lack of performance in reaching the targets.

Davies told the meeting however the management bonuses ranged from $90,000 to $1 million for Hilmer (which was paid on a variety of bases, according to the meeting. These included chairing the NZ papers business, succession planning and it seems being a nice bloke on the board!)

Hilmer said the executives were part of teams and had responsibilities across the company, so where bonuses were paid, that reflected the performance in that part of their responsibilities.

But according to other Fairfax journalists present, Mark Scott, the putative head of the editorial side of the Australian metro publishing interests, and Alan Revell, the Commercial director, both were awarded large bonuses for the year. Scott was paid a $90,000 bonus and Revell, $100,000.

Davies’ questions drew applause from shareholders, but no feeling of discomfort from the board, especially Hilmer, who received a bonus of $1.096 million. A shareholder got up to support the board, but also made a point of supporting the tenor of Davies’ questions and made the following point “(It) is not only what we do, it is the shadow we cast”, which was a statement that the board as a whole didn’t seem to grasp.

He went on say that where bonus schemes were cut and dried and that was not fair, the situation should be looked at, and that drew more scattered applause.

Davies returned to ask Hilmer and chairman Dean Wills, if “it was sound management to create a culture of resentment”. She said there was a policy of big pay rises at the top and “squeezing, squeezing” down at the bottom.

Oh, and of course the Fairfax board asked for and received approval for the more than doubling of directors fees to $1.5 million from the previous $700,000, including superannuation.

That was for the usual excuses, more rules, more responsibilities and no retirement allowances. That provoked some debate, thanks to Davies’ questions, but they looked smug and content at the end of the meeting, even after the usual antics from crazy Jack Tilburn, the incoherent shareholder activist (self-styled).

It is obvious that despite the appearance of competence at the AGM, relations with the editorial staff in Sydney are not good. The further talk of cost cuts, which will be inflamed by Hilmer revealing that the company plans further (unspecified) staff cuts in the next few years(‘we will have to do more with less people if we want to be a strong and vibrant company for shareholders’, he said).

With half the SMH’s staff well paid and J-10 and above, they feel in the gun for the next cuts, even though it was clear from the meeting the paper has little idea to attract younger readers (who are serviced by cheaper reporters) and is concentrating on trying to exploit the older and wealthier A-B profile readership it dominates.

This requires well-paid experienced reporters, but apparently not at the SMH.

Meanwhile, The Age’s 150 year history was praised as was the new editor in chief, Andrew Jaspan. Michael Gawenda’s role as editor was praised, but there was a typical Fred Hilmer backhander in a comment about the future direction for The Age.

He said part of the future strategy for The Age was lifting the ‘editorial profile’ and ‘breaking more stories’ . The Age was to be “more lively and provocative”. Now is that damning with faint praise or what?

The importance of Melbourne was recognised with Ron Walker (“a pillar of the Melbourne business establishment”, according to chairman Wills) being elevated to the deputy chairmanship. But Wills hastened to add that no “succession” moves should be read into that.

I reckon that Roger Corbett looks the pea. Dean Wills is 71 and still waddling . He put his hand up for another term today and was voted back on.

But with Roger being forced to remain at Woolworths because there’s no successor and one has to be groomed (allowing Roger to posture in the ALH takeover), the chairman’s slot at Fairfax has to be kept warm for him. No other candidate comes near it.

Two other things from the meeting. In response to a question from the Australian shareholders’ Association, directors Mark Burrows and David Gonski do not have advisory work for any other media company, according to Wills. And the board is shortening the list of candidates to replace Fred, but no more news.

And, oh, Fred will probably get a going away present. When asked directly by a shareholder if Fred would be receiving a retirement payment, Wills went all secret squirrel and said “can’t and won’t say”‘ or words to that effect.

Most unsatisfactory.