Is the corporate AGM dead? Well, the Axa Asia Pacific Holdings AGM certainly would
have been a non-event yesterday if I hadn’t turned up. Despite having
245,475 shareholders, this $10.8 billion company attracted barely 100 of
them to the gathering at Jeff’s Shed in Melbourne.

There were only four shareholders who spoke: a left wing woman on a
disability pension who
wanted the board to donate their fees to solve famine in Africa, a
70-something waffler who went round and round in circles, one of the
classy Curry brothers from the ASA who only spoke very briefly against
the remuneration report and yours truly, who was up and down like a yo
yo from the back of the room over the 100 minute meeting.

It is true that happy shareholders are less likely to front up, but the most
surprising thing about yesterday’s meeting was that some quite
entertaining exchanges, controversial resolutions and interesting
voting outcomes didn’t generate any notable media coverage. Therefore,
the floor is ours.

For starters, we saw the directors’ club in action as chairman Rick Allert announced the retirement of his old
Southcorp mate Brian Finn and replaced him with a Coles Myer board
colleague, Patricia Akopiantz. Very cosy.

Normally you wouldn’t worry too much about board shuffling but Axa
APH demonstrates perhaps the best example of the importance of
strong independent directors. Remember when Paris-based Axa SA offered
$3.75-a-share or $3.16 billion for the 48.5% it didn’t own in late 2004. The independent
directors spent $7 million saying “non” – and with Axa
APH shares at $6.25 yesterday that decision has enriched in the
minority shareholders to the tune of $2.1 billion. Nice.

Axa SA originally invested $1.1 billion or $1.25 a share.
Therefore, they are now $4.5 billion in front and arguably the happiest
foreign investor in Australian history but this would have been
$6.6 billion if they’d succeeded in mopping up the minorities on the
cheap. I had
fun asking both chairman Rick Allert and the Frenchman up for
re-election, Bruno Jantet, if there was any bad blood about this missed
French opportunity and Bruno summed it by saying “no hard feelings”.

“You’re welcome to come back and offer $7-plus and we’ll think about it,” came the cheeky retort from the back of the room.

Rick Allert launched a spray against the excessive cost of regulation
and all this corporate governance compliance so I turned this around
and accused Axa APH of never taking a public stand on anything. Why
weren’t they part of the global syndicate of institutions suing News
Corp in Delaware?

Allert didn’t let his Liverpudlian CEO, Les Owen, answer any of the dozen or so questions but
Les sidled up later to say that Alliance Bernstein, the outfit which
manages most of Axa APH’s $80 billion, prefers to pursue any corporate
governance arm-twisting behind closed doors.

Speaking of institutional activism there was quite a protest against Owen’s latest $4 million equity incentive
because the performance hurdles kick in at 51% against the benchmark,
regarded as not much of a challenge these days.

Stripping out AXA SA’s 899 million shares, there were only 196 million
votes in favour and a hefty 136 million against. If AMP hadn’t stupidly
sold their 7% stake at just $2.22 a share in June 2004, a majority of
independent support might not have materialised.

Allert said the protest reflected the power of the proxy advisory
houses but once again the
media has missed the story of a controversial pay deal for one of our
most powerful money managers who will retire at least $20 million
richer from his visit Down Under. Then again, Les has undoubtedly done
a good job and seemed like a nice bloke as we chatted for about ten
minutes over tea and bickies after the meeting.