Former Woolworths CEO Roger Corbett ascended to the chairmanship of Fairfax Media in 2009 after incumbent Ron Walker fell on his sword when it became apparent he didn’t have the numbers to be re-elected at that year’s AGM.
After Walker signalled his intention to seek re-election for an additional nine-month period in The Australian Financial Review, the Fairfax family ignited a mighty battle when it released this statement on September 17, 2009. Two months later and Walker had resigned to avoid a humiliating defeat, clearing a path for his key ally Roger Corbett to assume the chair.
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Five years later and these circumstances appear to be remarkably similar to what might evolve in the lead-up to this year’s Fairfax Media AGM at the RACV Club in Melbourne on November 6.
Firstly, despite News Corp reports that 72-year-old Corbett should or would go after 11 years on the board and five years as chairman, it was the AFR that was given the scoop on Monday that he would be seeking re-election and then retire some time during the next three-year term.
Back in September 2009, Ron Walker declared he would be exiting in August 2010, sparking the all-out assault by the Fairfax family, which vowed to vote its 9.7% stake against his re-election.
There was a flurry of lobbying of institutions, and then Walker, who knows all about the numbers as a former Liberal Party treasurer and Melbourne lord mayor, agreed to go to avoid the ignominy of potentially being humiliated on the floor of the AGM.
The Fairfax family sold its stake in November 2011, which opened the door for Gina Rinehart to make her play as the company’s largest shareholder. Given past battles with Corbett and her decision to vote against both Linda Nicholls and Sandra McPhee at last year’s Fairfax AGM, it would be fair to assume he won’t have her support on November 6.
Such a move would leave Corbett’s re-election prospects largely in the hands of the next four largest institutional shareholders, who are disclosed to be as follows in the 2013-14 Fairfax annual report, which was released yesterday:
- Ausbil Dexia: 149.34m shares, or 6.35%
- Allan Gray: 133.46m shares, or 5.68%
- SAS Trustee Corp: 118.28m shares, or 5.03%
- Dimensional Fund Advisors: 117.71m shares, or 5%
Stand by for Allan Gray’s Simon Marais to receive a stack of publicity leading up to the Fairfax AGM as he is the only visible Fairfax institutional shareholder with a track record of public commentary and institutional activism.
The three main proxy advisers — Ownership Matters, Glass Lewis and ISS — will also be influential and prominent in the media.
Fairfax delayed the release of its notice of meeting until the last possible day, which tells you the Corbett re-election issue was no straightforward matter.
However, after doing the rounds of institutional shareholders, he is presumably confident about having the numbers after giving some private indications about the timing of his departure.
One other joker in the pack is the renewed radio merger talks between Fairfax and Macquarie Radio. Gina Rinehart is a huge Alan Jones fan and has been pushing this deal from the outset. This talk also emerged shortly before last year’s AGM when Rinehart had particular leverage given the prospect of a second strike on the remuneration report.
The independent Fairfax directors need to be absolutely sure there is no possibility that Rinehart’s voting decision on Corbett could be influenced by how the radio assets are dealt with.
Rinehart is an unusual major shareholder because she chooses to vote her Fairfax shares on the floor of the AGM, rather than by proxy beforehand.
This gives her an element of surprise. Since becoming the largest Fairfax shareholder in February 2012, she has been unpredictable in her voting patterns. During the marathon 2012 AGM in Melbourne her offsider John Klepec triggered a first strike on the remuneration report, opposed CEO Greg Hywood’s equity incentive scheme, and backed outside candidate Peter Cox.
However, she did support her friend and Hungry Jack’s founder Jack Cowin, and the now-departed TradeMe founder Sam Morgan, along with former Austereo CEO Michael Anderson. But former Ernst & Young CEO James Millar was opposed, as you can see in these voting results.
In 2013, it was expected Klepec would vote against the remuneration report, but when the institutions overwhelmingly opposed a second strike, he didn’t vote on that resolution, presumably to avoid being seen to have failed to bring on the board spill vote.
But this did not indicate any reduction in hostilities as Australia’s richest women then voted against the re-election of both female directors on the Fairfax board, plus Greg Hywood’s incentive grant.
What she does this year is anyone’s guess.
*Stephen Mayne is an external candidate for the Fairfax board at this year’s AGM who is being opposed by the other directors.