Macquarie Bank shares soared $1.75 to $64.98 this morning after the
Millionaire Factory told the ASX that I was running for its board. Just
joking, the stock was up in line with a stronger market. The notice of meeting
for the 20 July AGM was lodged at 5.34pm yesterday and the bank has
come out fighting, telling shareholders
that “Mr Mayne lacks the experience and skill required of a voting
director of the bank”.

This is the proposed platform that I requested they distribute to shareholders:

Stephen Mayne, age 37. Bcom (Melb). Stephen
Mayne is a Walkley Award-winning business journalist who has worked for a range
of newspapers, including The AFR and The Age, where he was
banking writer. He is also Australia’s leading retail corporate governance
campaigner and was the founder of,
Australia’s best known independent ezine. Stephen is standing on a platform
that Macquarie Bank adopt US best practice and implement a blanket ban on staff
from taking up shares in floats or capital raisings the bank is managing. If
elected, he will resign once this policy is comprehensively implemented.

To its credit, Macquarie published this in full. However, they’ve also provided
a counter argument which is three times as long as my pitch and
includes the following claims:

  • No firm allocation are permitted to staff “unless prior approval is
    obtained from senior management and the proposed allocation is clearly
    disclosed in the prospectus”.
  • Historically, such approval has only been granted in limited
    circumstances where the issuer of the securities is a Macquarie
    specialist vehicle and in order to align the interests of the relevant
    staff and the issuer vehicle.
  • Staff may apply for securities offered as part of a general public
    offer by completing an application form in the same manner as retail

Right, let’s see now. The 1996 Transurban float was massively scaled
back, closed after three days and most retail investors got a measly
two $500 stapled securities. The float was led by Macquarie but
Transurban is a stand alone independent company, not a specialist
fund, yet Macquarie executives finished up with
the following allocations:

Laurie Cox, Macquarie director and Transurban chairman: 1500 costing $750,000
Alistair Lucas, Laurie’s then deputy in Melbourne office: 280 costing $140,000
Richard Shepherd, Macquarie deputy managing director: 400 costing $200,000
Paul Robertson, senior executive: 123 costing
Anthony Kahn, infrastructure guru: 100 costing $50,000

A further six Macquarie executives at the time received allocations of
at least 43 stapled securities, which have been an absolute bonanza for
all investors having returned more than 800% over the years, including
dividends. Macquarie even acknowledged in the notice of meeting that
this would be illegal in the US, but claimed that, under the American
system, “securities are usually only available from underwriters”. As
if the semantics of underwriting, lead managing and sponsoring is a
material issue.

Macquarie should change its policy but has refused, so investors now
have a means of lodging a protest by voting for the outsider. Given
I’ve promised to resign once US best practice is adopted, how could
institutions vote against me when they are the very Macquarie clients
being dudded by the millionaires scooping up some of the best value
share offers? And faced with a vocal critic on their board, surely
they’d do anything to secure a quick resignation.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey