Gunns AGM, Murdoch, US billionaires

2. Another woeful AGM display from John Gay



By Stephen Mayne, confirmed again today as Australia's most unsuccessful candidate

Gunns Ltd executive chairman John Gay made Rupert Murdoch look like a corporate governance saint with his performance at today's AGM in Launceston.

For starters, the press were locked out, something no other top 200 company does. The Sunday Age's Clair Miller fronted up with a proxy and didn't disclose where she worked. She fired off a succession of questions at the start of the meeting on forestry valuations and should have a good story for this weekend.

Gay, surely the most inarticulate chairman of a major public company, opened proceedings with a stuttering 8 minute address, but his profit forecast of between $95 million and $100 million for 2005-06 helped reverse the recent share price slide as the stock rose 7c from a two year low to reach $2.82 by midday.

For some unexplained reason, Gay was accompanied on stage by the auditor from KPMG, company secretary Wayne Chapman and Les Baker, the executive running the controversial $1.3 billion pulp mill project in the Tamar Valley.

The five non-executive directors got to sit in the audience and one of the blokes I was running against, Eddie Rouse's former ENT CEO David McQuestin, was two foot from me in the next row. The "meeting room" at Gunns HQ is a hopelessly cramped and stuffy venue with no air conditioning and not enough room for the director to even sit up the front.

Asked who was the nominated senior independent director to answer questions about the executive chairman, Gay point blank said they didn't have one and he didn't know.

When I asked a series of questions of candidate Cornelius Van der lay, Gay at first told him not to answer a couple of the questions. Are these independent directors or John Gay puppies?

Former Liberal Premier Robin Gray got up and declared Gay was "a mere pussycat most of the time" and an absolutely "outstanding chairman and outstanding managing director" who has made lots of money for all the shareholders. Shame about the 40% slump in the share price since November 2004, something Gay partly blamed on all the negative publicity his company has received of late.

The only more fawning address came from former state Liberal MP and federal candidate in Bass in 2001, Tony Benneworth. "I really admire this great company," he declared whilst sitting in front of Robin Gray and without pointing out his Liberal Party history. "We need Gunns in Tasmania...it would be a catastrophe if they were not here."

It seems both major parties are sucking up to the giant tree slaughterers ahead of next year's Tasmanian election. I asked Gay about Mark Latham's claim that he "runs Tasmania" but he declined to expand on his relationship with Premier Paul Lennon, who Iron Mark said "wouldn't scratch himself" without John Gay's say so.

The vote turned out to be a comfortable win for the incumbents as follows:

Candidate	For	Against	Abstain	Undirected
David McQuestin	176.9m	15.6m	7.4m	4.9m
Cornelius Van der lay	178.6m	15.8m	10.8m	4.9m
Stephen Mayne	27.3m	158.9m	3.3m	4.9m

However, even if the outsider had got 94% of the "for" and "against" vote, I still would have lost thanks to the undirected proxies and the rort that is the old "no vacancy" tactic.

John Gay was told I'd be running for the board every year until he relented and offered himself up for election like every other executive chairman and he conceded this would now be considered, as would the "no vacancy" tactic and the retirement benefit scheme for directors which attracted a modest 15 million protest vote against the remuneration report.

The rest of the meeting was a relatively civilised affair with no interjections or shouting, as apparently occurred at the 2001 meeting when the Wilderness Society ferals took over.

Les Rochester, the former journalist who is running the Tamar Residents Action Committee (TRAC) Valley spoke eloquently, as did numerous other respectable anti-logging and anti-pulp mill shareholders or proxies. A lot of the questions were detailed and sensible and the more erudite and informed answers came from Les Baker and the company auditor. John Gay seemed to have little patience with the whole process.

Gay is clearly frustrated that the pulp mill is being so bitterly opposed when he has been pressured into doing it for decades by greenies and everyone else. He pointed out that woodchips fetching $80 a tonne would now be value added into pulp that would fetch $700 a tonne, but still the Greenies aren't happy.

However, despite expressing confidence it will proceed, this does not appear so sure. Les Rochester was elected to the West Tamar council yesterday and there's every chance that the Greens could hold the balance of power after next year's state election.

If that happenes, share in Gunns would plunge below $2 as they have only prospered courtesy of sweetheart deals with successive Liberal and Labor governments over the past decade.



3. In defence of Murdoch, by another henchman



By Stephen Mayne

Another News Corp AGM, another major attack from a veteran Murdoch commentator. Last year it was Terry McCrann ranting that I was an "an utterly insignificant gadfly," this year it's Mark Day who has unloaded on Crikey in The Australian today. Try these lines for size:

He (Mayne) is running a full-scale vendetta against Murdoch and the company, obsessed by his conspiracy theories, fixated by the inner workings of the Murdoch family and consumed by his belief that Murdoch exercises ruthless control over every headline, every word and every comma that appears in his worldwide publications.

In the first 100 words of his reports from New York, Mayne accused Murdoch of indulging in brazen spin, dodgy tactics and procedural trickery. That was followed by the throwaway line that "We all know that Rupert Murdoch is a control freak", and his recent calculations that News Corp would be worth more if Murdoch were dead. Charming.

Then we have the old chestnut about accuracy – I'm just "a gadfly with a long track record of getting his facts wrong." But what about the accuracy of Mark Day's column, which was written without seeking any comment to check the facts?

I've never said Murdoch exercises ruthless control over every headline, but I do say his culture doesn't tolerate dissent from the company line as it demonstrated by the pathetic coverage of the poison pill controversy and the remarkable uniformity of the pro-Iraq war stance across his outlets globally.

They weren't my calculations that News Corp shares would rise if Rupert died, that's what three respected analysts said at the big industry funds conference in Cairns two months ago. I reported accurately what they said. And Crikey doesn't go to 5500 daily subscribers any more, it goes to 7000+ subscribers and a further 23,000 squatters.


As for the "brazen spin, dodgy tactics and procedural trickery" at the AGM, these are the facts. At recent AGMs Rupert has improved by dealing with each item individually and making his introductory remarks at the beginning of the meeting. In New York we returned to the intimidatory bad old days where all seven items of business were lumped in together and his introductory remarks were once again at the end.

The brazen spin was to lump in the support from three billionaires to come up with a large percentage figure and declare there was no protest vote without even disclosing the actual votes against various resolutions, which were at record highs.

Then we have this bizarre line suggesting I'm the only person concerned about corporate governance at News Corp: "His campaigns against proposals at the AGM were profoundly ineffective. Clearly, the company's credibility outweighs Mayne's among most of the shareholders."

I didn't campaign against anything and didn't even vote my stock. The campaign was run by the 11 global institutions who are suing News Corp in a Delaware court over the broken poison pill promise. They were backed up by the most powerful proxy adviser in the world, Institutional Shareholder Services, and the world's biggest fund manager, Boston-based Fidelity, which voted its 5% stake against most of the resolutions.

Finally, Day asserts that "show ponies who set out to attract headlines and attention by their activism need to separate those antics from what they purport to be journalism."

They are separate, Mark. I didn't attend or ask any questions at the press conference after the AGM and haven't for the past seven years. That would be double dipping. I was there as a shareholder who is underwater on a $12,000 investment and simply engaged in perfectly rational and sensible debate at the AGM, then expressed some opinions in reporting back to people who have paid to receive such reports for the past six years.

My formal occupation is "shareholder activist and commentator," yet Day is somehow suggesting this shouldn't be allowed. I'm not some neutral "he said, she said" reporter, striving for balance. Much of what I say is strong opinion and heaven forbid, relentless campaigning on a whole range of issues. Today I've been ripping into Gunns Ltd executive chairman John Gay over his bodgy corporate governance practices.

As for News Corp responding to every mistake and opinion, bring it on. Respond to this one: Rupert Murdoch has once again taken the corporate governance low road by not releasing the full voting results from the AGM. Where are the all-important open and undirected proxies that must be released by ASX listed companies? Embarrassingly large, were they? Resolutions could have failed without them and the support of the three billionaires, perhaps?

Over and out.



12. Is Pristel being groomed to replace Peter Blunden?



By Stephen Mayne, seven year veteran of News Ltd in Sydney and Melbourne

The Sunday Herald Sun's new editor, Simon Pristel, will do well emulating the sales growth achieved by Alan Howe over the past 11 years and probably produce a more interesting newspaper at the same time.

Pristel started in journalism on the same day as Crikey – January 9, 1989 – in what remains arguably the largest cadet intake in Australian journalism history when 29 of us were blooded in Melbourne together.

Pristel was on The Herald and for the first few months was led by then editor Eric Beecher, the new Crikey boss, before he resigned in mid-1989. I was on The Sun, but occasionally Pristel and I would share the bus out into the eastern suburbs (just like Virginia Trioli, he's from the Donvale/Mitcham area) and he struck me as incredibly serious and ambitious.

While other cadets fooled around in cadet classes, the worst offender being Rupert Murdoch's current New York-based spinner Andrew Butcher, Pristel was oh-so-serious, but clearly very bright.

He quickly immersed himself in learning every facet of the craft and I can't recall ever seeing him in the pub, which in some ways makes his ascension a little surprising given the blokey News Ltd culture. He certainly won't p*ss in the sink during conference like Col Allan, get done for drink driving like Peter Blunden, or projectile vomit after a budget booze up like the Telegraph's editor Dave Penberthy.

By early 1999 I was completely out of my depth as Col Allan's chief of staff on The Daily Telegraph and Pristel was Sydney correspondent for the News Ltd national group. It was quite embarrassing that Pristel would wander over mid-morning and know more about what was going on than I did.

News Ltd traditionally doesn't promote people who haven't been inculcated into the Sydney culture, but it would be surprising if Pristel became known to unimpressive executive chairman John Hartigan during this period. However, he would have come onto Lachlan Murdoch's radar in recent years and his ongoing influence over News Corp's Australian operation should not be discounted.

News Ltd is clearly grooming Pristel to replace Peter Blunden on the daily Herald Sun, but unlike Alan Howe, it will be Blunden's time of choosing. Just like John Howard, Blunden has enough runs on the board to go when he's ready, but he's not really the management sort so that could be many years away.

Alan Howe might have worked for News Ltd since the 1970s, but Blunden has also notched up 30 years with the company and this was after following his dad into the Murdoch empire. The likes of Piers Akerman and John Hartigan are from a similar News Ltd vintage.

Howe's removal makes Piers Akerman's recent letter to The Australian talking up his performance even more interesting. Howe and Akerman are very close family friends, so was this a last desperate attempt to save Howe by Akerman or was it a hamfisted chest-beating exercise that contributed to his demise?

Check out the official announcement here. It proves the old adage that News Ltd editors rarely get sacked and leave in a huff. Rupert likes to keep them in the tent and Howe will join a long line of former editors wiling away their time in "management" or occupying some lower editorial rank, including Rocky Miller, Ian Moore, Piers Akerman, Steve Howard, Campbell Reid, Alan Farrally, Peter Wylie, Martin Beesley, Des Houghton and Mark Day.

The genuine walkers who have never returned comprise a much shorter list and include Eric Beecher, Steve Harris (after a brief stint in management) and new SMH editor Alan Oakley.



24. American billionaires with companies named after them


By Stephen Mayne

It was interesting picking up a copy of the special Forbes "The 400 Richest People in America" edition and compare it to the much thinner and less comprehensive BRW Rich List.

Thumbing through the names an interesting trend emerged – numerous American billionaires have companies named after them, something which is not so apparent in Australia. This is just a sample of the better known examples from the Forbes Rich List:

Billionaire	Company	Industry	Wealth ($US)	Rank
Herb Allen	Allen & Company	investment banking	2bn	133
Anthony & Barbara Cox	Cox Communications	media	12.5bn	12
Riley Bechtel	Bechtel	engineering & construction	2.4bn	109
Michael Bloomberg	Bloomberg LP	financial information	5.1bn	40
James & Margaret Cargill	Cargill	agriculture	1.8bn	164
Michael Dell	Dell Computers	computers	18bn	4
Roy Disney	Walt Disney	entertainment	1.2bn	283
Ray Dolby	Dolby Laboratories	sound	1.4bn	235
William Clay Ford	Ford Motor Co	automotive	1.2bn	283
Ernest Gallo	Gallo Inc	wine	1.2bn	283
Donald Hall	Hallmark	greeting cards	1.8bn	164
Hearst Family	Hearst Corp	media	2bn	133
William Hilton	Hilton Corp	hotels/casinos	1bn	346
Jon Huntsman	Huntsman Chemicals	chemicals	1.6bn	198
Peter Kellogg	Kellogg Inc	packaged food	2.2bn	116
Leonard and Ronald Lauder	Estee Lauder	cosmetics	3bn	73
Ralph Lauren	Ralph Lauren	fashion	3.3bn	67
Richard Marriott	Marriott Hotels	hotels	1.4bn	235
Forrest & John Mars	Mars Inc	confectionary	10bn	19
Charles Schwab	Charles Schwab Inc	discount stockbroking	3.8bn	58
Thomas Siebel	Siebel Systems	IT	1.3bn	258
John Simplot	Simplot Inc	potatoes	2.5bn	93
Martha Stewart	Martha Stewart Living	housewares	970m	377
Donald Trump	Trump Inc	real estate	2.7bn	83
William Wrigley	Wrigley Inc	chewing gum	3.4bn	65

The comparison with Australia might reflect the more modest nature of Australian business where naming something after yourself is considered a bit egotistical.

A quick glimpse at BRW throws up names such as Gerry Harvey (Harvey Norman), the Smorgon family (Smorgon Steel) and the Myer family, but after that it's relatively slim pickings.

Are Australians too modest to merge their name with their business, or are we just hopeless at generating brands of any description? Why isn't it Pratt Board, rather than Visy Board and Lowyfield, rather than Westfield? Why isn't it Packer Broadcasting Ltd or Murdoch Media? Your thoughts would be appreciated to smayne@crikey.com.au.

Copyright © 2024 The Mayne Report. All rights reserved

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