Crikey publisher Eric Beecher stuck his neck out yesterday and predicted that Fairfax chairman Ron Walker and CEO David Kirk were for the high jump with deputy chairman John B Fairfax and his old Rural Press CEO Brian McCarthy set to take over.
The fall of the Howard Government has severely dented Ron Walker’s power given he was the most prolific Liberal Party bagman in history and can’t exactly pick up the phone to Kevin Rudd or Stephen Conroy whenever it suits. Ron is also getting a bit long in the tooth, turning 70 in September next year.
With Fairfax shares plunging to a new five-year low of $2.83 in morning trade, pressure is mounting for action but it all comes down to who the biggest shareholders are and which directors are coming up for re-election.
Walker joined the Fairfax board in early 2003, became deputy chairman in 2004 and had the top job by 2005. He was first elected in October 2003 with the usual 99% in favour and was comfortably re-elected in 2006, although the 5 million shares voted against was three times that of fellow candidate Roger Corbett, but remained above 99%.
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The Rural Press merger was announced shortly after the 2006 AGM, so the 2007 board election saw John B Fairfax and his son Nick Fairfax elected for the first time and they copped much bigger against votes of 12 million and 49.7 million respectively.
Given that Mark Burrows quit the Fairfax board last year over the blatant conflict of advising Lachlan Murdoch on his aborted bid for the Packer family’s media rump, only two of the Fairfax directors re-elected in 2005, David Evans and Peter Young, will be up for re-election at the 2008 AGM.
That means either Ron Walker or Roger Corbett will need to join the field in order to satisfy the Corporations Law requirement that at least one third of the board face election each year.
If Walker is up this year, then John B Fairfax should strike in the coming months and negotiate a departure based around the threat of a proxy battle. If not, then he’ll have to wait another year, unless the Fairfax family have been able to turn two spots on the board into majority support over the past year.
It won’t be easy blasting Walker out because the Fairfax family aren’t even the largest shareholder any more after some recent buying by the Commonwealth Bank. The major Fairfax shareholders currently stack up as follows:
- CommBank: 14.93%
- Fairfax family: 14.63%
- Perpetual: 6.38%
- NAB: 6.13%
- Maple-Brown Abbott: 5.77%
- Lazard Asset Management: 5.04%
- 452 Capital: 5.03%
If we do get a full-on proxy fight, Perpetual chairman Bob Savage will be in a very tricky spot given he also sits on the Fairfax board. And the same applies to lead house banker NAB.
Listen to yesterday’s polite retirement advice to Australia’s busiest director, Peter Mansell, at yesterday’s Zinifex EGM.