Activist asks the tough questions

Stephen Mayne is the first to agree that he is a flea. He flits around town on his bicycle seeking out company directors to irritate with questions that they would prefer went unasked.

His shareholdings are flea-sized too, usually $300 worth bought online in time to get him to the annual meetings of his target companies, then sold immediately afterwards.

If he is lucky the price might have gone up enough to cover the $16.50 online brokerage. However, forced more often than not to accept losses, Mr Mayne says he is down $200,000 since he quit his last real job to stand for Parliament against former premier Jeff Kennett.

It is the price Mr Mayne, a Walkley Award-winning former business journalist, has willingly paid for his brand of shareholder activism, winkling out and exposing conflicts of interests here, examples of cash for comment there and institutional apathy everywhere.

The self-styled watchdog behind the audacious website Crikey.com.au, and its allied subscriber site, Shareowner.com.au, is at the tail end of an exhausting annual meeting season, his busiest to date.

He has attended up to four meetings a day over a seven-week period, to question directors, and has nominated for 10 boards where he has taken specific issue with standards of corporate governance.

He claims the credit for Steve Vizard's retirement from Telstra after challenging the entertainment impresario's potential conflicts of interest, and to everyone's amazement, his own included, Mr Mayne did respectably well in the voting at the Commonwealth Bank, NRMA and Woolworths.

At Woolworths he scored a stunning 56 per cent of the primary vote and, as if to emphasise his points about the need for greater corporate democracy, he still failed to win a seat. The vote was decided on a show of hands after the board announced it would use the open proxies to swing a ballot against him.

On Monday he will try for the board at the department-store retailer, David Jones, and on Thursday he will stand at the National Australia Bank with virtually no chance of success at either.

Asked what he would do should he ever win a place at the table he says: "I'd negotiate my exit. At David Jones I would offer to back out if the directors dropped their rights to 35 per cent shopping discounts."

If the 31-year-old Mr Mayne has tickets on himself that does not include any belief that he has the qualifications or skills to make a good director, although he says his newspaper experience might have been a useful novelty at West Australian Newspapers.

He is also the first to acknowledge that, apart from a small measure of support at the Commonwealth Bank from union-based superannuation funds, he is still tilting at windmills. His Woolworths proxies had little significance, boosted as they were by the institutional donkey vote after the board made no prior recommendation to vote against him.

So why does he do it? "Pressure! To bring pressure on companies to change their habits. I am trying to lead the debate and trying to encourage other people to take more control of corporate elections."

He says he is disturbed by the lack of transparency, the way directorships are handed out among the business establishment, the way companies spend public-relations money on their image and, perhaps most of all, the passive acceptance of the status quo by the institutional fund managers.

"Nobody would ever say I have sought to get on a board by going through the backroom-club system," he says.

He describes his activism as public relations in reverse. "Companies that have big PR departments use them to pull the wool over everyone's eyes. I am trying to educate them to pull the wool away and reveal what's really going on."

Mr Mayne adds that if fund managers would only speak out, the whole corporate debate in Australia would be transformed. "Where was AMP in the 1980s at shareholder meetings of Elders IXL and Bond Corporation? They should have been having a fight with those companies."

Mr Mayne, who has often said on his websites that it helps in his game to be a little bit mad, evokes a mixed reaction among his former business journalism colleagues. Admirers say he has significantly raised the standard of shareholder questioning at meetings. Detractors say he is acting out of self-interest, ego and personal ambition.

Christopher Webb, The Age "Strictly Private" columnist contemptuously describes him variously as "scruffily dressed" and an "AGM flea". That doesn't bother Mr Mayne so much as the low levels of scepticism brought to bear on the corporate community by the business media. "Money drives power and corruption. Journalists reporting on the flow of money and power should be the most watchful and hardest hitting."

He describes journalism as a noble profession, one of the few where self-interest and public interest are aligned. But it was still not sufficiently noble to chain Mr Mayne to a newspaper office.

He won his Walkley Award at Sydney's Daily Telegraph for doing what he still does on his websites, buying shares that entitled him to ask tough questions at shareholder meetings then reporting and analysing the answers.

He says that the Rupert Murdoch-owned Daily Telegraph allowed him only so much latitude before he was told to go easy on the Westfield chief, Frank Lowy and the Packers. After that, and not for the first or last time on a matter of principle, he quit the job.

Mr Mayne came to the forefront as a somewhat unorthodox agitator during his public brawl with Jeff Kennett, for whom he had worked as a public relations adviser in the early days of his premiership. Mr Mayne questioned the premier's ethics over the purchase of Guangdong Corporation shares, and later stood for Burwood against Mr Kennett.

In that campaign Mr Mayne demonstrated the power of the Internet as a political tool, setting up the audaciously named website Jeffed.com to niggle his opponent. He says that next year he wants to start a new Liberal-leaning political party that will represent the growing millions of small shareholders and superannuation fund investors. He plans a Senate challenge at the coming federal poll.

He concedes that he is ambitious and he hopes that somewhere along the line his activism will reward him financially. Apart from recent signs of a positive cashflow on his websites, Mr Mayne says it has wiped $200,000 off his wealth. His net asset worth is down to $20,000 and he has a mortgage that should soon take it to zero, where it won't be worth suing him for defamation.

Always a share dabbler, he estimates that he would now be worth at least half a million dollars had he not sold everything to fund his campaigns. He says he sold 2000 Commonwealth Bank shares at $7 (now worth $31), 20,000 John Fairfax Holdings at $1.40 ($4 down from a high of $6), 7000 Channel Seven at $3 ($6.50 down from $8), 5000 BRL Hardy at $2 ($8) and 4000 ERG at $1.30 ($3 down from $13.50). Then, in the tech wreck earlier this year, he lost $10,000 from $35,000 he borrowed from Paula Piccinini, his barrister wife, so he could go after the dot-coms.

"I'm a living example of the value of long-term investment as opposed to investism," he says. Investism - that's his word, not ours.

Copyright © 2024 The Mayne Report. All rights reserved

• share
  Share
  • 
    Facebook
  • 
    Twitter
  • email
    Email
  • print
    Print
  • link
    Copy Link
  • cancel
    Cancel