Fairfax Media chairman Ron Walker yesterday told shareholders he had “no idea” if BRW’s estimate of his wealth at $427 million was an example of accurate Fairfax journalism.
And Big Red clearly has no idea either about the notion of boardroom accountability, industry expertise and alignment of interests.
Asked why a seriously wealthy man like him had only bought 1.06 million Fairfax shares since joining the board in 2002, the chairman could only claim that he owned more shares than his predecessors.
That might be so with Dean Wills but the chairman before that, Brian Powers, had a much bigger interest, albeit partly funded by his old boss Kerry Packer.
Walker also fudged on the issue of whether he would retire at the end of his three year term next November, when he’ll be 70. It sounded like he wants to run again, which really is a disgrace when you consider the huge value destruction from the three-year acquisition binge he and CEO David Kirk have overseen.
Fairfax shares tumbled another 10.5c to a 15-year low of $1.625 yesterday and The Sunday Age’s Michael Bachelard was absolutely right today when pointing out that the company could hire 30 quality journalists on $115,000 a year for the same $3.4 million that it paid David Kirk last year.
Bachelard and fellow house committee members at The Age, Greg Baum and Matthew Murphy, spoke out at yesterday’s Fairfax AGM on four issues around executive pay, Kirk’s failure to front journalists and the Walkleys sponsorship. The only issue they missed was the sacking of Mike Carlton.
It is ridiculous that Fairfax seems to have two CEOs and given that deputy chairman John B Fairfax is prepared to put his $400 million fortune into the company, he should be given a chance to chair the company with his old Rural Press CEO Brian McCarthy installed to replace Kirk as CEO.
Ron Walker wanted to stonewall the question but John B Fairfax was good enough to answer when I asked about his margin loan position and it seems that he has re-arranged the family’s debt to leave the Fairfax Media stake unpledged.
Audit committee chief Roger Corbett and the auditor from Ernst & Young were both asked to justify signing off on accounts claiming Fairfax is worth $5 billion when the market capitalisation is less than half that.
Sadly, Walker and Kirk dominated the debate and on this one they defended the asset values, including the $6 billion-plus in intangibles, which looks quite delusional given the structural shift of advertising from newspapers to the internet.
Former Labor Communications Minister Chris Schacht made a worthwhile contribution to the meeting at Ron’s much-loved Crown Casino, lambasting Fairfax for missing the internet boom, failing to grow earnings per share and not having enough diversity or media experience on the board.
John Curry from the Australian Shareholders’ Association, Schacht and The Age journalists did enough to defeat the remuneration report from the floor, but observers got a sense that Walker and Kirk weren’t listening on anything.
You won’t see too many leadership duos more in denial than those two and surely it is just a matter of time before the more sensible directors move on both of them.
Listen to CBA CEO Ralph Norris reveal yesterday that ABC Learning is the biggest disaster he’s faced at the bank with at least $450 million definitely lost.