UPDATED: Fairfax chairman Roger Corbett has agreed to a salary cut after angry Fairfax shareholders railed against the board’s performance at the company’s annual general meeting in Melbourne today.
Corbett, currently paid $432, 730, agreed to reduce his salary to under $400,000 in exchange for support from the Australian Shareholders Association for the company’s remuneration report.
Hungry Jack’s founder Jack Cowin also made a rare public statement by denying that he is on the board as a proxy for majority shareholder Gina Rinehart.
“I am not an associate, I’m an independent director of Fairfax,” Cowin said. He did, however, acknowledge that he had discussed voting tactics with Rinehart, a longtime friend, before today’s vote.
Rinehart was represented by Hancock Prospecting chief development officer John Klepac, who blasted the board after the end of the lengthy, at times heated, AGM.
“The shareholders have more blood on the floor than you would find in [Lance Armstrong’s] US Postal Service camper van at the Tour de France. But there’s been no blood spilt at board level.”
Fans of the dead-tree editions of The Sydney Morning Herald and The Age will draw little comfort from CEO Greg Hywood’s pronouncement that the digital-only future could be only three years away.
“We will produce papers so long as there is a profitable demand for them,” he said. “To subsidise the metro business from any other business is not part of our strategy … The future will be predominantly digital rather than print.”
Shareholders speaking from the floor expressed frustration at the company’s recent acquisition of old media assets, its dwindling share price — which has halved in six months to 38 cents — and the poor relations between the board and the company’s largest shareholder, Gina Rinehart.
Around 80% of proxy voters supported the generous remuneration package for Fairfax executives — representing a significant protest vote.
Former Labor politician and veteran Fairfax shareholder Chris Schacht, who described Rinehart as the “elephant in the room”, decried the impact of the public stoush between Corbett and the mining magnate on shareholder confidence. He said the company’s performance over recent years had been “appalling”. “The absolute diminution in shareholder value in this company is extraordinary,” he said.
Schacht drew a heavy round of applause for saying the Fairfax board appointment process operated too much like a cosy clique.
Of the opposition to granting Rinehart a seat on the board, Corbett said: “This has not been a Roger Corbett issue — this has been a board issue. The board is absolutely unanimous in its position on Mrs Rinehart.”
While praising Rinehart’s success in selling minerals — and welcoming her 14% shareholding — Corbett said allowing her onto the board would not be in the interests of all shareholders.
Stephen Mayne, now a policy officer at the Australian Shareholders Association, read a long extract from a swingeing opinion article on Crikey by Eric Beecher accusing Corbett of ignoring advice about the growth of online advertising. He also pressed Corbett to say whether decisions to acquire the Rural Press stable while selling off shares in the highly profitable Trade Me business were correct in hindsight.
Corbett said he did not recall the incident described by Beecher and that decisions about asset acquisitions and sales were made in the best interests of shareholders at the time. “Everyone can be wise with the benefit of hindsight — including you,” he told Mayne.
While acknowledging the share price is of “immense concern”, Corbett was looking on the bright side: “Fairfax publications now have more readers than ever before and we are managing the transition of audiences to digital better than almost any newspaper company in the world.”
He said the company had conducted a detailed analysis on the pros and cons of de-merging the company earlier this year — including selling off the metro and radio assets — but this was not judged in shareholder interests. As for the future, he said: “We are not ruling anything out.”
His speech and Hywood’s both drew tepid rounds of applause from the crowd.
Media analyst Peter Cox was trounced in his bid to get a board seat after not securing the support of the current directors.
Stephan Mayne said Corbett had shown incredible arrogance by not speaking to Cox about his ideas for the company: “You’re behaving as if you’re the board of Google.”