Today we continue the Crikey Honour Roll of 2005 – with the awards
for business. The judges were: Eric Beecher, Stephen Mayne and Sophie
COMPANY OF THE YEAR
QBE Insurance escaped the
worst effects of Hurricane Katrina, continued its international
expansion, cracked the ASX top 15 for the first time, and was a model
of good corporate governance. All this with modest executive pay that
sees no executive on a base salary above $1 million and modest
performance payments, despite the outstanding profit and share price
growth over the past year driven by CEO Frank O’Halloran who has been
in charge since 1998. Other contenders: CSL, Macquarie Bank.
Crikey readers say: “BHP, its time in the sun again has come again.” – James Walker.
“Macquarie Bank – what other company has so successfully co-opted
ex-MP’s and others with connections to make a buck?” – Shaun Ratcliff.
CEO OF THE YEAR
Few Australian companies have global leadership in a sector, let alone in a business as tough as healthcare, but CSL’s Brian McNamee
has delivered a 174% profit increase to $547 million in 2004-05 and the
stock is up from $26 to $41 over the past 12 months. McNamee perfectly
executed the merger of the old Red Cross plasma therapies business
(acquired in 2000) with the $1 billion purchase of its rival Aventis
Behring in March 2004. Other contenders: Mark McInnes (David Jones) and Allan Moss (Macquarie Bank).
Crikey readers say: “Lindsay Fox…he is really on a good
wicket, and well on the way to becoming the monopoly for freight within Victoria
and, to a lesser extent, the rest of Australia.” – Julien Marr.
“John McFarlane – ANZ are so far in front of the other four in terms of
managing their reputation, thinking through their public relations,
managing regulators, managing the media, and – so far as you can tell
from malleable bank financial statements – making OK money (and,
sensibly, not making too much)” – Ian Rogers.
CORPORATE DEAL OF THE YEAR
Graeme Hart’s food asset swapping has
delivered him a clear profit of more than $1 billion thanks to the $2.1
billion float of 80% of Goodman Fielder, which Burns Philp bought for
$2 billion in 2003. The biggest earner has been on the $NZ 245m that
Hart privately paid for New Zealand Dairy Foods in 2002. This was
swapped into other assets which are being sold to Goodman for about $1
billion as part of the float deal. This bloke really knows how to
profitably trade assets and his 57% stake in Burns Philp is now worth
$1.4 billion. Commendation: Affinity Health. After buying
Mayne’s 53 hospitals for $813 million in 2003, the venture capitalist
offloaded the business for an impressive $1.4 billion in April this
Crikey readers say: “iTunes Music Store launch” – Guy Hargreaves.
THE 2005 CORPORATE GOVERNANCE AWARD (NOT)
Rupert Murdoch’s poison pill extension without
reference to his News Corporation shareholders. For sheer
untrustworthiness, Murdoch’s undertakings to get the re-incorporation
and vote through proved they weren’t worth the paper they were printed
on – just like his tabloids. Other contenders: Robert Gerard,
who knew he had been in a major bunfight with the Tax Office when he
accepted a position on the board of the Reserve Bank, a major error in
judgement and propriety.
Crikey readers say: “The Victorian Labor Party. Ah, seriously now.” – Julien Marr.
“Just for you Stephen, I’ll say Gunns” – Shaun Ratcliff.
THE 2005 CONFLICT OF INTEREST AWARD
became chairman of the influential newspaper publish Fairfax this year,
and that appointment created four high-profile areas of conflict of
interest for the can-do businessman who sees them as contacts of
interest, not conflicts of interest. Walker is a close mate of the
Packers, who control Australia’s biggest media company, and his
appointment at the rival Fairfax drew public acclaim from James Packer.
Walker is also conflicted as the chairman of an important “independent”
media company because he’s a Liberal Party powerbroker, the chairman of
the Commonwealth Games board and the head honcho of Melbourne’s grand
DISGRACED BUSINESS PERSONALITY OF THE YEAR
For the scale of the offence, the size of the fall and the leniency of the penalty. no-one came near Steve Vizard.
A federal government appointee to Australia’s most prestigious board,
his greedy insider dealings using boardroom information would make him
a winner in almost any year. Other close contenders: the HIH trio (Rodney Adler, Ray Williams, Brad Cooper).
BUSINESS RORT OF THE YEAR
the administrators were first appointed in August 2004, it was only
when the final report was released in August this year that the scale
of the rorting at major mining outfit Sons of Gwalia became
apparent. Former CFO Eardley Ross Adjie racked up $125 million in off
balance sheet gold and currency trading losses and was suspended in May
2000 after warning the situation was “out of control.” Rather than
coming clean, the directors covered it up and the losses eventually
blew out to $190 million and brought down the company with $300 million
owing to creditors. ASIC is inquiring and someone ought to be locked up.
THE 2005 CORPORATE WELFARE AWARD
If receiving $1 million a day from Federal taxpayers isn’t embarrassing enough, Brisbane-based childcare behemoth ABC Learning showed
no shame when it recruited the federal minister formerly responsible
for such largesse, Larry Anthony, to its board in March, barely five
months after he lost his seat. ABC Learning is not exactly hard up for
a buck as its founder, Eddie Groves, is worth more than $200 million
after the massively subsidised stock rocket from less than 50c five
years ago to its recent high of $7.55.
BUSINESS BLUNDER OF THE YEAR
Yesterday’s profit downgrade at Multiplex
was just the latest embarrassment for the Australian-based builder of
London’s Wembly Stadium. The construction giant built up by rough Perth
entrepreneur John Roberts was flying high after its December 2003 float
and was aggressively raising more capital in the six months before the
shock announcement that profits on the $1.8 billion Wembley
construction project were non-existent. Instead, a loss of up to $109
million is now predicted and Multiplex shares have plunged from $6 to
$3.26 this year. Roberts has been deposed as chairman, a class actions
is underway and ASIC could yet lay charges against the company which
bit off more than it could chew. Other contenders: Patrick’s takeover bid for Virgin Blue when the airline wasn’t hedged for the spiralling oil price.
Crikey readers say: “Fairfax’s redundancy package.” – Dave Smartt.
“Lion Nathan/Coopers attempted takeover.” – Michael Walker.
BUSINESS QUOTE OF 2005
keep that to myself, but I sure wouldn’t recommend it to my mother” –
Phil Burgess, Telstra’s imported Group Managing Director, Public Policy
& Communications, when asked if he would invest his own money in
Telstra. Commendation: “A lot of factors determine the quality
of a newspaper, but the number of journalists is not one of them” – New
Fairfax CEO David Kirk after announcing more than 60 editorial
redundancies at his company’s flagship newspapers.
SON OF MEDIA MOGUL COMPETENCY AWARD
On one day alone in the witness box at the One-Tel court case, Rupert Murdoch’s son Lachlan Murdoch said
“I don’t recall” and other expressions of forgetfulness 210 times. This
followed his emotional departure as heir apparent at News Corp (with an
excessive $10 million payout).
Crikey readers say: “I’d nominate Stephen Mayne’s son. At least he can count to 20 with his shoes on.” – Pat Macpherson
MOST UNSEEMLY DEPARTURE PACKAGE
Former Fairfax CEO Fred Hilmer
was handed a gratuitous $4.5 million departure gift by the John Fairfax
board after his role over seven years in helping drive the company
towards the edge of the media cliff. At least the big payouts to the
likes of CBA’s David Murray came after years of good performance.