Paramount Mining Corporation Ltd has lost its chairman Steven Cole after a group of shareholders two weeks ago voted down a number of proposals, including increases to director remuneration.
While the loss of the respected lawyer was ostensibly over directors' fees, Mr Cole had previously raised concerns about an apparent block of dissident shareholders potentially seeking to gain control of the company without paying a takeover premium.
"It was only after considerable reflection that I resigned from the board," said Mr Cole in a statement.
He said that under the current board remuneration rules $30,000 a year was to be shared by all three non-executive directors, irrespective of the extent of the effort and contribution to the company.
"I do not regard myself as a mercenary person, however the present shareholder endorsed maximum level of non-executive director remuneration is ludicrous."
Speaking later to WA Business News, Mr Cole said investors had to pay closer attention to what was happening in companies in which they held shares.
He also took issue with the way a number of apparently new shareholders in Paramount emerged to vote against the proposals.
"It is a cynical exercise to take up shares to vote against proposals in an EGM," Mr Cole said.
"Why invest in a company to say 'we don't agree with what you are doing' unless you have another agenda."
In a previous statement published following the results of the extraordinary meeting on April 29, Mr Cole had noted the way certain shareholders had appeared to vote collectively and warned investors in the company that come shareholders may intend to "wrest effective control of the company.
In his announcement, Mr Cole named Cunningham Securities adviser Kyle Haynes as one of the group he perceived had acted in concert to vote down a number of resolutions. Mr Cole said Mr Haynes had previously attempted a board spill at Paramount.
Mr Haynes today denied any knowledge of this group or that he played any part in a collective effort to vote down the resolutions.
"I don't know why they named me," he said.
He said he was confused by that earlier statement and surprised by Mr Cole's resignation, stating that he had not voted as part of a group but had supported some resolutions.
Mr Haynes said he was not unhappy with the company but felt it was undervalued in the market.
"I would rather the share price was higher than it is now," he said.
Paramount has appointed veteran geologist and CEO Maureen Muggeridge as interim chair.
Mr Cole is on the board of retirement homes group Brightwater and listed technology renewable energy company Solco Ltd.
Below is the full announcement:
As an interim measure, the company's CEO Maureen Muggeridge has resumed the role of executive Chairman.
Mr Cole's retirement is a direct consequence of certain resolutions concerning non executive director
remuneration at the Company's EGM held on 28 April 2008 failing to gain majority shareholder approval.
The Company and its executive management very much regret this outcome given the significant value added by
Mr Cole since he joined the board in December 2007.
"Mr Cole's resignation is a direct outcome of the recent EGM in which, despite strong endorsement from a
large number of supportive shareholders, a resolution to approve the increase in directors' aggregate remuneration was not carried," said Ms Maureen Muggeridge, Paramount's CEO.
"This means that the Company is unable to compensate Mr Cole for his outstanding services to the Company to date, let alone be able to offer fair and reasonable remuneration in the future to any non-executive director until this is rectified by shareholders at some future shareholders' meeting."
"Mr Cole will be greatly missed by the Company," Ms Muggeridge added. "In the short time he has been with
us, he has contributed strongly at every level, in particular in implementing new standards of corporate
governance, and playing a vital role in strategic initiatives towards the growth of the Company and
achievements of its goals.
The Company remains firmly committed to these goals, and will keep the market informed as progress is made."
Mr Cole's retirement is effective as of today.
"It was only after considerable reflection that I resigned from the board," said Mr Cole.
"I do not regard myself as a mercenary person, however the present shareholder endorsed maximum level of non-executive director remuneration is ludicrous (ie. $30,000 p.a to be shared by all 3 non-executive directors, irrespective of the extent of the effort and contribution to the Company).
"The failure of shareholders to respond to an invitation at the EGM to raise that level to relatively modest industry accepted norms is both naive and insulting. Service on listed company boards, especially as chairman, is demanding and onerous, and warrants fair and reasonable remuneration."
Mr Cole added "I believe PCP now has in place both the strategy and the resources to take the Company to the
next level of its corporate evolution. I have every confidence in the application and technical skills of the
Company's executive team to carry the Company forward."