The Australian’s John Durie appears to have the drop on proxy voting at a very important AGM in today’s column: “Former ABC Learning chair David Ryan looks as if he will be re-elected at tomorrow’s Lend Lease annual meeting but again after a big protest vote.”
Given all that has happened at ABC Learning over the past two weeks, this is completely unacceptable.
The investment community simply cannot give the man who chaired ABC Learning’s audit committee for the past four years another three year term on Lend Lease.
Lend Lease chairman David Crawford is a former liquidator, so he should appreciate better than most the outrageous governance practices at ABC Learning which contributed to its dramatic collapse and the destruction of $3 billion.
Ryan is also chairman of tollroad giant Transurban and suffered a record-breaking 34% against vote at the recent AGM, based on his ABC record.
Insurance Australia Group chairman James Strong copped the second biggest protest vote against an independent ASX100 chairman yesterday when 18% of the shares were cast against him in the poll.
However, when you strip out the 29 million votes cast by IAG’s mutual cousin, road service provider NRMA Ltd, plus the 40.7 million “proxy discretion” votes that Strong largely controlled, the against vote of 153 million shares was above 20%.
David Ryan joined the Lend Lease board in 2004 and chairs the risk and audit committee — an embarrassing situation given the terrible job he did at ABC Learning.
The big institutional Lend Lease shareholders who will decide Ryan’s fate tomorrow are:
- Balanced Equity Management: 8.5%
- Axa Asia Pacific: 6.5%
- Bank of New York Mellon: 5.12%
However, we get into unchartered waters because the Lend Lease employee share scheme sits above all of them as the largest shareholder with 9.75% or 39 million shares. Employee share schemes were pioneered by the Keating Labor government and Lend Lease has Australia’s biggest.
Lend Lease spokesman Mark Gell this morning confirmed that whilst some staff have discretion to vote as they see fit, “the bulk of it goes along directors lines”.
Given that Ryan’s sins are far greater than James Strong’s, it would be a disgrace if he kept his $190,000-a-year Lend Lease directorship for another three years because the board controlled the staff share scheme.
At Transurban, Ryan hid behind confidentiality in dodging the debate. Now that ABC Learning has collapsed and he is out, there is nothing stopping him giving a full explanation.
The proxies closed at 10am yesterday but any institution that voted in favour should rescind those votes and turn up at tomorrow’s AGM to listen to the argument as to why Ryan deserves another three years.
Mark Gell said this morning that Ryan’s nomination was proceeding. Clearly chairman David Crawford should force his withdrawal before the AGM starts. If not, shareholders should vote him off the board as Australia’s directors’ club has tolerated failed directors for far too long.
*Listen to the three radio interviews on Kerry Stokes using security to end debate at the Seven Network AGM on Monday.