Myer receives "second strike" on remuneration

Written on the 30 November 2018 by Ben Hall

Myer receives "second strike" on remuneration

Shareholders of Myer (ASX: MYR) have delivered a "second strike" on remuneration at the company's AGM in Melbourne, with 37.49 percent of proxy votes rejecting the resolution.

At perhaps the most important AGM in Myer's history, shareholders backed an aggressive and ongoing campaign from the company's biggest investor, Premier Investments, to force the "no" vote which easily beat the 25 percent required to achieve the second strike.

Last year shareholders, led by Premier's chairman Solomon Lew, delivered a "first strike" on remuneration which requires the 25 per cent vote.

However, Lew's battle to force a spill motion of the entire board failed when shareholders overwhelmingly voted against the spill motion of the entire Myer board. Proxy votes showed 63.26 percent voted against the spill motion.

Chairman Garry Hounsell addressed the AGM and described the second strike on remuneration as "disappointing".

"Naturally we are disappointed by this result especially given the level of support we have received from many shareholders," Hounsell says.

"In my opinion this reflects broader issues at play, and we respect the vote taken by the shareholders.

"Thank you to shareholders who stood by us. We won't let a conflicted shareholder take control of Myer.

"Regardless of how you voted today, the board will lead Myer in the best possible way to build business and build shareholder value."

Solomon Lew has initiated the increasingly bitter war of words between himself and the Myer board since he became its biggest shareholder in March 2017 when Premier Investments bought 10.77 percent. Since then, its stake has been halved in value.

So far this year, Myer has had to deal with the sacking of CEO Richard Umbers in February, in March the company dropped out of the ASX200 because of its plunging share price and in September it reported a FY18 loss of $486 million.

When asked about the effect that the Lew-led attacks have had on the company performance, Hounsell told the AGM this has been "very significant".

"This has been a vindictive campaign against the company. It's had a significant impact on company," Hounsell says.

"Solomon Lew says he supports (new CEO) John King but he keeps lobbing bombs which makes John's job harder by the day.

"Our staff are saying 'will i have a job tomorrow?'. Our suppliers are saying 'will i still be able to sell to Myer and will I get paid?'

"Our landlords, they get rattled. Same with our bankers, our shareholders. It's a travesty."

Ahead of the Myer AGM in Melbourne, Premier Investments chairman and billionaire Solomon Lew continued his long-running attack on the Myer board and he's been calling on investors to vote for its removal.

At the Premier AGM on Thursday, Lew threw his support behind Myer CEO John King and said he would support his options being granted to him, but his "target" for change is the board itself.

"I see the removal of the current Myer Board as the crucial circuit-breaker the company needs," Lew said.

"No-one can have any confidence in the current Myer Board, which has handed the keys to the company over to the banks after running it into the ground.

"I have spent time in recent weeks with Myer CEO John King and his chief lieutenant Alan Winstanley, and we have had very productive and positive discussions.

"I sincerely want them to succeed in turning Myer around. After all Premier has the most to lose if they don't!

"But no CEO can succeed if he or she is saddled with a Board like this current lot at Myer.

Solomon Lew also used a horse racing analogy to describe his aggressive stance on the Myer board.

"A business is like a racehorse. It needs a good jockey to steer it during the race, but it also needs a master, experienced trainer to prepare it, get it fit and healthy and in the best shape to perform.

"In this case, John King and his team may be decent jockeys, but the problem is with the trainer: the failed Myer Board.

"Myer is being trained by people who don't know one end of a horse from the other!

"We need to change trainers. We need Bart Cummings, not more shortcomings." 

 

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Author: Ben Hall

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