Westfield 2010 transcript

Stephen Mayne: I apologise, I'm a candidate for the Macquarie Group Board and the AGM starts in 15 minutes, so I'll have to ask a couple of questions and then do a runner.

Frank Lowy: Sorry, I didn't quite follow.

Stephen Mayne: Macquarie Airports is having a AGM meeting at 11:00am, so I have some questions to ask now.

Frank Lowy: Go for it!

Stephen Mayne: The first one is to congratulate you on finally reaching the top of the 'BRW Rich List' which was announced yesterday. What took you so long!

Frank Lowy: I don't make money that quickly. I worked very hard for it!

Stephen Mayne: Congratulations on that and obviously, long-term shareholders in particular have shared in that success. Two issues I want to raise. The first one goes to... and I know it is remuneration. But the $31 million that the three executive members of the Lowy family are paid, I notice in the video that you talked about pulling back from executive duties, but I do also note that your salary hasn't pulled back commensurately to that, and $15 million a year, still, I think makes you close to the highest paid Australian executive.

If the Lowy family was earning, say $8 million a year in salary, rather than the $31 million a year, that would free up $23 million. That would be an extra cent per share in distribution. So we'd be able to go up from 94 cents to 95 cents if you brought back the family salaries to what would be probably a more appropriate bench mark level. I just feel that the $40,000 a day that you're on is a little bit over the odds.

Now that you are top of the pops, it maybe would be an appropriate time to follow the lead of James Packer and the late Kerry Packer and working for, in this case, nothing. But if not nothing, something a little bit more modest.

The other issue I wanted to raise is to say that I'm a councillor in the City of Manningham in Melbourne. We hosted the magnificent Doncaster Westfield, which was your first move outside of Sydney. The jewel in the crown in Manningham and Melbourne's best shopping centre and we absolutely love it. There's a couple of small issues, though.

Recently you proposed a 10-storey apartment tower at the back of Westfield. Our offices rejected it. 140 people complained. It was unanimously rejected by the councillors, 9-zip, and then you ploughed on with the State Government and we're feeling a little bit rail-roaded as a community that you pushed into residential development, which we don't normally do, and you've really upset the community in doing This.

The other issue I want to ask you about is paid parking. I know that that is one of the councils in Adelaide recently rejected your application for paid parking. We at Doncaster would prefer that parking wasn't paid, that it was free. People can get in and out faster. Why are we pushing so hard with paid parking? Is it really such an important part of the business? I would have thought that it was pretty marginal, and I know that we would love you even more in Manningham if you competed with Chadstone, your biggest rival, which offers 10,000 free car parks, and you went back to a free parking model which served you so well for the first 44 years or so in Doncaster.

So congratulations again, and I look forward to hearing your responses to the issues.

Frank Lowy: OK, why don't I start with the last one about, I think the last one was parking. The one before the last was about the residential building. And I think the first one was about my pay. I'll leave that for the last if you don't mind!

Why do we charge for parking? Because we believe that this service has to be paid for. And some centres don't charge, some centres do. We don't copy, necessarily, other people. I think we lead the way. I believe it is a legitimate charge. As I said, we provide a facility and those people who come by bus or train don't have to pay. And those people who come by car, they pay road tax, they pay all kinds of taxes on the way, and I think it is appropriate that for that service, for that service that they pay.

I think… I understand that Steven wants to speak also on this, on that particular question.

Steven Lowy: You would know that it was a major benefit to the local area that was successful and the paid parking with the necessary part with the economics to make that work. That's first of all.

Second of all, as you would also know, the very large bus interchange there. A major transport interchange and it is, therefore, important to facility the consumers who are going to shop in the shops. Actually, the parking is freed up for them and not for people to spend all day and use the bus and go somewhere else and using up car parts. And thirdly, you would also be aware that the level of customer service and security in the car park is elevated enormously from where it used to be in terms of car park management systems and all of those ultimately come at a cost and they need to be serviced.

All of us would obviously prefer to have free parking, but in a sense, it is a luxury that can't be afforded if you want all of the other services and the other services have been overwhelmingly embraced by the community. And that shopping centre now does over $700 million in sales and is one of our most successful centres, not only in Melbourne, but also in Australia.

With regard to the approval for the residential tower you're referring to, it is not uncommon in the process of getting an approval that certain members of the community object to it. If that was the case, and we would have listened to the objectors of Bondi Junction, that wouldn't be there. And if we listened to the objectors of Sydney City, that wouldn't be there. And it is a common part of the approval process that you have objectors And then you go through the proper process, and in this case, we went through the proper process, and the end result was an approval, in this case for our residential development that will add value to the area.

Some may agree, some may not agree. We believe that. And we also believe that it will add value to the ultimate shopping centre, so they are two specific responses to your questions on Doncaster.

Frank Lowy: Thank you, Steven. There is not much more than I can answer with that. Steven has answered it very comprehensively. And generally, our obligation is to create wealth for our shareholders in a way, and we are doing that, I think, all the time. Sometimes we slip a little and when we correct ourselves.

The next question was about... sorry, not the last one. Oh, the last question was my pay! Maybe I forget talking about it! You know, because you are here. I like to see you and I like to hear from you, but you repeat the same questions year in and year out!

And I more or less get the same questions year in and year out. But nevertheless, there are some members here who haven't heard the question or the answer, so I'm going to tell you again.

You lump the four Lowys, or the three Lowys now. Three, that's right! The three Lowys who are executives of the company together. They are three people. One could be Smith, Johns and Goldsmith. So we don't live in the same house. It is not one household and each one is entitled to pay what the company believes is appropriate to pay. We have a very, very strong remuneration committee and they take into consideration all of the issues which are on and what executives are available and what they do and how they do it.

So I think it is wrong in the first place to assume that there are three Lowys that are lumped together. They are three different people doing three different jobs. And I think that each one is entitled to get paid. And a month of pay is fixed by the Remuneration Committee, along with the top 10 or 15 executives.

As far as I'm concerned, you've asked me to work for nothing for the last five or ten years. Well, I don't work for nothing. I know I can afford it, but I believe I'm entitled to get paid. And just on the sideline, I don't keep that money that I get paid from the company. I give it away, and a lot more, to deserving causes. I don't believe that the Westfield shareholder is a deserving cause for me to give them an extra cent. I think that there are a lot more causes that are, but this is a philosophical discussion.

The fact is, what James does - good luck to him. He's a good guy. He chooses to do that. And in fact, there are many other companies, chief executives and chairmen, that do other business. I don't do other business. I, of course, am engaged in many public activities, which I have all my life, and I love to do them well. I wake up very early and I go to bed late, but I don't sleep enough!

So I can do this job and a number of other public jobs that I do. The size of... I think I didn't address the size of the pay. I mean, really, I can't comment on that, except that I want to make it clear that I work and I'm entitled to get paid for it. Any other questions that I haven't responded to. Maybe not to your satisfaction, but I responded to all of Your questions? I think I did. Thank you, Steven, and I'll see you next year, I hope!

Keep me on my toes!

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