The Macquarie Bank board has received a sharp message about its dodgy
share allocations policy for staff after I polled more than 15% in
yesterday’s director elections – the best corporate board result in almost four years.

And for the first time in 24 corporate tilts, support from those on the
floor who listened to the debate meant that the final vote of 15.53% was better than the 15.49% vote in the
pre-AGM proxies, despite the chairman using open proxies against me. The raw figures were as follows:

For 14.767m, Against 80.529m, open 4.299m

Final poll:
For 21.241m, Against 115,496m

I’ve never picked up anything like another 43.8% from a poll which, in
this case, lifted the total value of support from $929 million worth of
stock to shares worth $1.34 billion, which is very healthy but clearly
overwhelmed by the $7.27 billion in shares voted against.

A full analysis of all the previous 24 tilts is
available here,
but Macquarie comes
in at number eight in terms of the proxies and seven in the
polls, where the vote is usually much lower after chairmen use the open
proxies as this table of the ten best results demonstrates:

How open proxies have been used to shaft the outsider

Company Year Pre-AGM Proxies Final Poll result % points
Woolworths 2000 54.74% 44% -10.74
NRMA 2000 45.59% 20.52% -25.07%
CommBank 2000 39.71% 32% -7.71%
AMP 2000 33.89% 21.8% -12.09
WA News 2000 28.41% 19.81% -8.6
John Fairfax 2001 20.58% 18.94% -1.64
ASX 2002 18.7% 15.46% -3.24%
Macquarie Bank 2006 15.49% 15.53% +0.04
Gunns 2005 14.7% 14.18% -0.52
Telstra 2000 14.65% 1.23% -13.42

The Age tried to suggest
this was a bad result but I had a so-called proxy expert predicting a
final vote of just 5% from the happy bunch of Macquarie shareholders.
It was certainly a much better outcome than the disappointing 11.41%
when AMP was imploding in
2003 and the miserable 7.85% at Fairfax last year.

It just goes to show that running on a specific platform is more
effective than pretending you’d make a great director. The Macquarie
position of allowing directors and management to take up shares in
floats is illegal in the US and it is now clear that some of their
shareholders want them to adopt US best practice to eliminate these
potential conflicts of interest.

Imagine what might have happened if there’d been a recommendation from
the two proxy advisory kingmakers, CGI and ISS. Even the Australian
Shareholders Association voted 350,000 proxies against, but I’m batting
zero out of 24 with this highly conservative grey army.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey