Close to fisticuffs at James Hardie AGM
February 2, 2010
Dear Mayne Reporters,
whilst the unionists and asbestos campaigners stayed away, we still had plenty of interesting action at the James Hardie annual information meeting today, especially when a fellow 80-something shareholder took on Crazy Jack Tilburn and the two almost came to blows.
When Tilburn went to have his second crack at the microphone, the fellow sitting four down from him let fly telling him to shut up and stop wasting everybody's time. Tilburn responded by repeatedly inviting him to step outside so they could settle their differences, prompting a burly security guard to stand directly behind the elderly combatants. Have a listen to the hilarious exchange here.
All the audio exchanges
1. Why don't you drop the James Hardie name?
2. Dutch domicile, poor tax advice and ATO vendetta
3. Why is Peter Willcox still on the Telstra board plus dividend constraints?
4. Proxy voting, pay levels and remuneration report
5. The Jack Tilburn clash
6. Did we sack PwC as auditor?
7. Can't we find Australians for the board?
8. Is Louis Gries really the world's best building products CEO?
9. You blew $100m on this silly share buyback!
With its suite of "legacy issues" spanning tax fights in Australian and the US along, the asbestos compensation fund and the continuing question marks over the convoluted corporate structure with a Dutch domicile, US headquarters and Australian listing, there was always going to be plenty of issues to trawl over.
Hardie has been abandoned by most Australian professional directors with the exception of two old brawlers - Telstra chairman Donald McGauchie and Catherine Walter, who ran that famous war with the NAB board four years ago.
Shareholders today elected two new American directors to the board, David Andrews and David Harrison, neither of whom turned up at The Mint auditorium in Sydney. And on hearing from the American chairman, CEO and new company secretary, I asked whether the asbestos scandals has made it difficult to recruit Australians?
Chairman Michael Hammes drawled about Cathy Walter but she's a bit different, having not scored any other significant new boards since the NAB fight and carved our a niche as a governance expert. Some cynics claim that Cathy was the old Australian prepared to join James Hardie but the chairman denied there was any issue recruiting locals.
I also asked whether the board had investigated changing the company name and CEO Louis Griers said only briefly during the 2004-05 asbestos debacle. Chairman Hammes said the name, which remains mud in the Australian community, was one of the company's biggest assets in the US where its highly profitably fibre-cement product is universally known as "Hardie-board".
After the chairman's address focused heavily on the need to attract and retain what he claimed was the world's best building products management team, I asked whether this suggested a big protest was coming on the numerous pay-related resolutions?
Alas, even though we don't get to see the proxies until the Amsterdam AGM on Friday, the chairman said the big proxy advisers had no problems with the resolutions so shareholder support was strong.
When it came to approving 235,385 restricted stock units for Louis Gries, the chairman used the words "retention payments" so I rather sarcastically asked whether this was in response to numerous other companies attempting to poach the world's best building products CEO. Chairman Hammes said this was partly the case and it also reinstated some bonus elements for Gries whose operating performance has been strong whilst the various legacy issues continue to hit Hardie.
Indeed, today's first quarter profit result was disappointing as legacy issues combined with the crashing US housing market to send EBIT down from $106 million to $65 million.
At one point Hardie shares were down 10% at $4.03, but they recovered to only close 7c weaker for the day at $4.43.
This fed in with the last of 12 resolutions which most annoyed shareholders - the foolish decision to spend $236 million buying back stock at an average price of $6.62 over the previous year.
Chairman Hammes claimed this was only a technical resolution, so I admonished him by saying shareholders who didn't participate had dropped about $100 million on this venture and some of us would be minded not to give any further approvals.
Given that the sub-prime crisis blew up in August last year, Hardie would have been well advised to abandon the buyback program far earlier than April this year, as the excuses provided today about "no one could predict this" sounded a little lame.
That's all for now as there's a plane to catch.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
whilst the unionists and asbestos campaigners stayed away, we still had plenty of interesting action at the James Hardie annual information meeting today, especially when a fellow 80-something shareholder took on Crazy Jack Tilburn and the two almost came to blows.
When Tilburn went to have his second crack at the microphone, the fellow sitting four down from him let fly telling him to shut up and stop wasting everybody's time. Tilburn responded by repeatedly inviting him to step outside so they could settle their differences, prompting a burly security guard to stand directly behind the elderly combatants. Have a listen to the hilarious exchange here.
All the audio exchanges
1. Why don't you drop the James Hardie name?
2. Dutch domicile, poor tax advice and ATO vendetta
3. Why is Peter Willcox still on the Telstra board plus dividend constraints?
4. Proxy voting, pay levels and remuneration report
5. The Jack Tilburn clash
6. Did we sack PwC as auditor?
7. Can't we find Australians for the board?
8. Is Louis Gries really the world's best building products CEO?
9. You blew $100m on this silly share buyback!
With its suite of "legacy issues" spanning tax fights in Australian and the US along, the asbestos compensation fund and the continuing question marks over the convoluted corporate structure with a Dutch domicile, US headquarters and Australian listing, there was always going to be plenty of issues to trawl over.
Hardie has been abandoned by most Australian professional directors with the exception of two old brawlers - Telstra chairman Donald McGauchie and Catherine Walter, who ran that famous war with the NAB board four years ago.
Shareholders today elected two new American directors to the board, David Andrews and David Harrison, neither of whom turned up at The Mint auditorium in Sydney. And on hearing from the American chairman, CEO and new company secretary, I asked whether the asbestos scandals has made it difficult to recruit Australians?
Chairman Michael Hammes drawled about Cathy Walter but she's a bit different, having not scored any other significant new boards since the NAB fight and carved our a niche as a governance expert. Some cynics claim that Cathy was the old Australian prepared to join James Hardie but the chairman denied there was any issue recruiting locals.
I also asked whether the board had investigated changing the company name and CEO Louis Griers said only briefly during the 2004-05 asbestos debacle. Chairman Hammes said the name, which remains mud in the Australian community, was one of the company's biggest assets in the US where its highly profitably fibre-cement product is universally known as "Hardie-board".
After the chairman's address focused heavily on the need to attract and retain what he claimed was the world's best building products management team, I asked whether this suggested a big protest was coming on the numerous pay-related resolutions?
Alas, even though we don't get to see the proxies until the Amsterdam AGM on Friday, the chairman said the big proxy advisers had no problems with the resolutions so shareholder support was strong.
When it came to approving 235,385 restricted stock units for Louis Gries, the chairman used the words "retention payments" so I rather sarcastically asked whether this was in response to numerous other companies attempting to poach the world's best building products CEO. Chairman Hammes said this was partly the case and it also reinstated some bonus elements for Gries whose operating performance has been strong whilst the various legacy issues continue to hit Hardie.
Indeed, today's first quarter profit result was disappointing as legacy issues combined with the crashing US housing market to send EBIT down from $106 million to $65 million.
At one point Hardie shares were down 10% at $4.03, but they recovered to only close 7c weaker for the day at $4.43.
This fed in with the last of 12 resolutions which most annoyed shareholders - the foolish decision to spend $236 million buying back stock at an average price of $6.62 over the previous year.
Chairman Hammes claimed this was only a technical resolution, so I admonished him by saying shareholders who didn't participate had dropped about $100 million on this venture and some of us would be minded not to give any further approvals.
Given that the sub-prime crisis blew up in August last year, Hardie would have been well advised to abandon the buyback program far earlier than April this year, as the excuses provided today about "no one could predict this" sounded a little lame.
That's all for now as there's a plane to catch.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.