After flying back to Melbourne from the Fairfax Media AGM yesterday, the taxi went straight to Manningham City Council for another long night with colleagues discussing issues such as governance, performance reviews and all our inter-personal relationships.
Anticipating the obvious question, the opening line was: “Guess what? I got 42 million Fairfax votes in favour!”
A few second later, came the sotto voce follow-up: “and, err, 1.37 billion against.”
However, the single-digit club wasn’t a lonely place at the Four Seasons Hotel yesterday because Steve Harris only managed 127.4 million votes or 8.75 of the directed votes in favour.
Despite some solid lobbying of colleagues in the industry funds space, Media Super chairman Gerard Noonan finished behind Harris with 112.8 million votes or 7.75% in favour.
The contrast with Roger Corbett was stark indeed as he attracted 1.44 billion votes in favour and just 42.2 million or just 2.84% against.
Clearly Corbett’s record as the longest-serving director since February 2003 and his contribution to sustained under-performance, over-paying for assets, missing all the online classified plays and two big payouts to departing CEOs counted for nothing among the institutional investors.
There was also some interesting side-plays with the abstain voting where Corbett only had 3.45 million shares refusing to take a position, whereas Harris and Noonan had about 33 million abstaining and mine was up at 69.3 million.
Clearly, a couple of the industry funds followed the advice of their peak body ACSI and backed Harris and Noonan while abstaining on the serial candidate. However, Noonan was expecting far more votes from super funds in favour and is starting to make inquiries about Australia’s cumbersome corporate voting system.
Even the remuneration report protest was relatively modest at 228 million or 15.4% against, although it you strip out the Fairfax family’s 230 million shares from the 1.253 billion in favour the protest rises to 18.2%.
None of the three outside candidates stood a chance when Dean Paatsch, that miserable kingmaker from proxy adviser RiskMetrics, recommended against the lot and backed Corbett as the new chairman.
Ironically, The Age and The SMH today have published this 1500 word double page spread in their Money sections from yours truly, which lashes super fund governance and quotes Paatsch extensively, including his line that “many funds rely far too heavily on us”.
Governance at Fairfax got a big run yesterday, including the extraordinary revelation from Corbett that the David Evans conflict in being a director of two major radio station players did not occur to anyone on the board for two years.
Corbett was clearly very disappointed that Evans chose to quit Fairfax rather than Village Roadshow. However, perhaps Evans recognised that his directorship at BSkyB alongside Rupert and James Murdoch also represents a major conflict of interest with Fairfax, so a quieter time at Village Roadshow was the better option.
The Evans departure on November 15 will leave Corbett’s control of the board hanging by a thread, relying on his casting vote as chairman, given that the situation will be 3-3, assuming CEO Brian McCarthy would back Nick and John B Fairfax in a showdown.
This makes the appointment of four new directors with much-promised media experience over the coming months absolutely vital.
Corbett stressed yesterday that all three defeated candidates were on the board’s list of potential directors and based on the atmospherics yesterday, I’ll be very surprised if they don’t appoint Harris.