Julien Playoust and Dr Michael Vertigan, the two challengers for the
Tattersall’s board, are meeting with shareholders at swanky Royal South
Yarra Tennis Club in Melbourne this morning as they lay out their
argument for being appointed to the board at the expense of
long-serving trustee Paul Kerr, of the famous public relations family.
In terms of contested board elections, this is the biggest Australia
has ever seen and probably won’t go down the path of NAB in 2003 or
Foster’s in 1990 when a proxy fight was averted by a peace deal. After
all, Playoust himself owns about $80 million worth
of Tattersall’s shares and is the lead respondent in the case against
the four long serving trustees and their outrageous claim for a $100
million payout as part of this year’s $2 billion Tattersall’s float.
Tattersall’s chairman David Jones, who also chairs the Melbourne
Cricket Club committee, sent the following note to staff in late
I would like your support for Peter Kerr’s re-election as a director of
Tattersall’s Limited at the AGM on November 21. There are 2 other candidates also seeking election. Tattersall’s already has
a very talented and successful board of directors, and my fellow directors have
voted unanimously to support Peter’s re-election.
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Therefore I ask that you now complete your Voting Proxy forms and immediately
return them to me as Chairman of Tattersall’s or to Computershare with a vote
FOR Peter; and AGAINST both of the other candidates. Many thanks for your support.
David Jones, Chairman
The existing Tattersall’s board have made a $72 million
against the $100 million claim which the challengers clearly believe is
excessive. What sort of corporate governance system allows four long
serving directors to make a $100 million claim against their own
It makes the recruitment process for the four new independent
directors at the time of the float particularly interesting. Did they
sign up on the understanding that they would support the trustees
remaining on the board and chasing their outrageous pay day?
So who are these new independent directors? James King is former boss of Colonial in Asia who also ran CUB for a
couple of years. Then you have Brian Jamieson who is currently running
the Minter Ellison office in Melbourne and before that was chairman of
KPMG in Melbourne. Even a former Rich Lister like Lindsay Cattermole
has no problem taking the Tatts coin. The last of the newcomers is
Harry Boon, who has recently retired as CEO of Ansell, a company which
did a lot of good for society over the years.
David Jones makes it clear that Kerr is unanimously supported, but
surely someone like Dr Vertigan, who was a fabulous secretary of the
Victorian Treasury during the Kennett years, would add plenty to the
board. Why couldn’t they just expand the board by two?
And how outrageous that they’ve gone down the old “no vacancy” route, declaring there are only two spots for three candidates.
As we’ve said many times before, if shareholders want to increase the
size of a board by two then they should be able to do that, provided it
is in accord with the company’s constitution.
Tattersall’s will only have seven directors after the retirement of
William Adams at the AGM and the constitution provides for up to nine.
Therefore, two additional director could have been appointed, but
instead, one of the three candidates will miss out, probably after
getting a majority of the vote.
Check out Stephen Batholomeusz’s excellent summary of the issues in The Agehere.