Crikey might not cost much to run but our financial position has certainly deteriorated over the past year as we build the site. Check out this article in The Age from 2000.

Activist asks the tough questions

By David Elias
Senior Age Journalist

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Stephen Mayne is the first to agree that he is a flea. He flits around town on his bicycle seeking out company directors to irritate with questions that they would prefer went unasked.

His shareholdings are flea-sized too, usually $300 worth bought online in time to get him to the annual meetings of his target companies, then sold immediately afterwards.

If he is lucky the price might have gone up enough to cover the $16.50 online brokerage. However, forced more often than not to accept losses, Mr Mayne says he is down $200,000 since he quit his last real job to stand for Parliament against former premier Jeff Kennett.

It is the price Mr Mayne, a Walkley Award-winning former business journalist, has willingly paid for his brand of shareholder activism, winkling out and exposing conflicts of interests here, examples of cash for comment there and institutional apathy everywhere.

The self-styled watchdog behind the audacious website, and its allied subscriber site,, is at the tail end of an exhausting annual meeting season, his busiest to date.

He has attended up to four meetings a day over a seven-week period, to question directors, and has nominated for 10 boards where he has taken specific issue with standards of corporate governance.

He claims the credit for Steve Vizard’s retirement from Telstra after challenging the entertainment impresario’s potential conflicts of interest, and to everyone’s amazement, his own included, Mr Mayne did respectably well in the voting at the Commonwealth Bank, NRMA and Woolworths.

At Woolworths he scored a stunning 56 per cent of the primary vote and, as if to emphasise his points about the need for greater corporate democracy, he still failed to win a seat. The vote was decided on a show of hands after the board announced it would use the open proxies to swing a ballot against him.

On Monday he will try for the board at the department-store retailer, David Jones, and on Thursday he will stand at the National Australia Bank with virtually no chance of success at either.

Asked what he would do should he ever win a place at the table he says: “I’d negotiate my exit. At David Jones I would offer to back out if the directors dropped their rights to 35 per cent shopping discounts.”

If the 31-year-old Mr Mayne has tickets on himself that does not include any belief that he has the qualifications or skills to make a good director, although he says his newspaper experience might have been a useful novelty at West Australian Newspapers.

He is also the first to acknowledge that, apart from a small measure of support at the Commonwealth Bank from union-based superannuation funds, he is still tilting at windmills. His Woolworths proxies had little significance, boosted as they were by the institutional donkey vote after the board made no prior recommendation to vote against him.

So why does he do it? “Pressure! To bring pressure on companies to change their habits. I am trying to lead the debate and trying to encourage other people to take more control of corporate elections.”

He says he is disturbed by the lack of transparency, the way directorships are handed out among the business establishment, the way companies spend public-relations money on their image and, perhaps most of all, the passive acceptance of the status quo by the institutional fund managers.

“Nobody would ever say I have sought to get on a board by going through the backroom-club system,” he says.

He describes his activism as public relations in reverse. “Companies that have big PR departments use them to pull the wool over everyone’s eyes. I am trying to educate them to pull the wool away and reveal what’s really going on.”

Mr Mayne adds that if fund managers would only speak out, the whole corporate debate in Australia would be transformed. “Where was AMP in the 1980s at shareholder meetings of Elders IXL and Bond Corporation? They should have been having a fight with those companies.”

Mr Mayne, who has often said on his websites that it helps in his game to be a little bit mad, evokes a mixed reaction among his former business journalism colleagues. Admirers say he has significantly raised the standard of shareholder questioning at meetings. Detractors say he is acting out of self-interest, ego and personal ambition. Christopher Webb, The Age “Strictly Private” columnist contemptuously describes him variously as “scruffily dressed” and an “AGM flea”. That doesn’t bother Mr Mayne so much as the low levels of scepticism brought to bear on the corporate community by the business media. “Money drives power and corruption. Journalists reporting on the flow of money and power should be the most watchful and hardest hitting.”

He describes journalism as a noble profession, one of the few where self-interest and public interest are aligned. But it was still not sufficiently noble to chain Mr Mayne to a newspaper office.

He won his Walkley Award at Sydney’s Daily Telegraph for doing what he still does on his websites, buying shares that entitled him to ask tough questions at shareholder meetings then reporting and analysing the answers.

He says that the Rupert Murdoch-owned Daily Telegraph allowed him only so much latitude before he was told to go easy on the Westfield chief, Frank Lowy and the Packers. After that, and not for the first or last time on a matter of principle, he quit the job.

Mr Mayne came to the forefront as a somewhat unorthodox agitator during his public brawl with Jeff Kennett, for whom he had worked as a public relations adviser in the early days of his premiership. Mr Mayne questioned the premier’s ethics over the purchase of Guangdong Corporation shares, and later stood for Burwood against Mr Kennett.

In that campaign Mr Mayne demonstrated the power of the Internet as a political tool, setting up the audaciously named website to niggle his opponent. He says that next year he wants to start a new Liberal-leaning political party that will represent the growing millions of small shareholders and superannuation fund investors. He plans a Senate challenge at the coming federal poll.

He concedes that he is ambitious and he hopes that somewhere along the line his activism will reward him financially. Apart from recent signs of a positive cashflow on his websites, Mr Mayne says it has wiped $200,000 off his wealth. His net asset worth is down to $20,000 and he has a mortgage that should soon take it to zero, where it won’t be worth suing him for defamation.

Always a share dabbler, he estimates that he would now be worth at least half a million dollars had he not sold everything to fund his campaigns. He says he sold 2000 Commonwealth Bank shares at $7 (now worth $31), 20,000 John Fairfax Holdings at $1.40 ($4 down from a high of $6), 7000 Channel Seven at $3 ($6.50 down from $8), 5000 BRL Hardy at $2 ($8) and 4000 ERG at $1.30 ($3 down from $13.50). Then, in the tech wreck earlier this year, he lost $10,000 from $35,000 he borrowed from Paula Piccinini, his barrister wife, so he could go after the dot-coms.

“I’m a living example of the value of long-term investment as opposed to investism,” he says. Investism – that’s his word, not ours.

Clarifying a few points

Now there are a couple of small things to clarify here. The reduction in my net wealth since September 1999 is about $100,000, but not all of that has gone into Crikey. There’s been $25,000 in mortgage payments, $15,000 on a wedding and $15,000 on a pre-wedding honeymoon.

About $100,000 has been invested in Crikey but that has been shared between four people with my slice about $35,000. However, this ignores the time value of money as the 100 hours of work you do for nothing each week is worth something.

The question of what I’d be worth having never sold a share is hypothetical because you use the profits from one stock to plough into the next. However, I did liquidate a $110,000 portfolio in 1994 to buy what is now Crikey’s home/office in East Melbourne. David Elias has mentioned the biggest missed opportunities. Some other bad sales include selling 1000 News Corp preferred shares at $6, 1000 Bank of Melbourne at $3 (taken over at $9), 18,000 GIO at $3 when could have sold at $5.35 to AMP and sales of all the big banks at about half their current prices.

I still hold shares in Centaur, HIH, David Jones and from the days when I would invest an average $3000 each time. The combined losses on these stocks amount to about $8000.

Shares currently in the $300 online category include Sharon Austen, King Island Company, Skilled Engineering, Beyond International, CDS Technologies, My Money Group, Infosentials, Biota, Sino Securities and MultieMedia just to name a few.

In terms of Crikey’s revenues, November was our best month to date with about 100 new subscribers coughing up $3000 and providing a net $2000 after tee-shirt, postage and merchant costs. This is about enough to pay the monthly mortgage so clearly Crikey will need to lift its game financially for it to be sustainable in the longer term. From February we will have renewals so theoretically our revenues should double although there will obviously be a fair churn factor.

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Peter Fray
Peter Fray
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