16/11/2004 - 21:00

Tim Treadgold: Briefcase - Pryor motive under scrutiny

16/11/2004 - 21:00


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If you believe Anne Pryor from the WA branch of the Australian Shareholders Association, David Humann is overworked, tired, in need of a holiday and should spend more time walking his dog and/or putting his feet up.

If you believe Anne Pryor from the WA branch of the Australian Shareholders Association, David Humann is overworked, tired, in need of a holiday and should spend more time walking his dog and/or putting his feet up.

If you believe Humann, who worked his way up from office boy to a member of the PriceWaterhouse world board, he wants more work and hates the idea of twiddling his thumbs.

In a journalistic nutshell that is the nub of the fascinating debate which unfolded last week at the annual meeting of the nickel miner, Mincor, which is chaired by Humann and in which Pryor holds a small parcel of shares.

As has become routine at many Perth public company meetings over the years, Pryor was a lone voice in questioning directors at the one public opportunity given to shareholders. For that, she is to be commended because shareholder apathy is a curse on capitalism.

But, having praised Pryor for her sterling efforts in the lion’s den it might also be timely to find out what her agenda is, and this is where we discover something deeply interesting because it seems to be as much political as it is commercial.

“There’s too much focus on rewards for directors and not enough for employees,” she said when questioned after the Mincor meeting.

It was a reply that caught Briefcase on the back foot and begged the observation that surely that was a political observation that had nothing whatsoever to do with the good running of a company.

Pryor, it appeared, spotted the error of her observation. But it was a case of the cat getting out of the bag despite her attempt to explain away the remark.

Some of the issues taken up by Pryor are commendable. It is a good thing that someone queries the terms of share option packages and directors’ fees. After all, these chaps (and let’s face it, there aren’t many women) only hold their positions in trust for all shareholders, so they deserve to be regularly hauled into the spotlight to justify their pay.

But this crusade on behalf of the ASA about people like Humann sitting on too many boards lacks substance. In fact, it becomes positively laughable when Pryor questions whether Humann has time to do his job efficiently because he sits on five boards.

Briefcase does not carry a candle for Humann. He’s big enough and ugl… (oops, better not go there) to look after himself – which he did quite brilliantly at the Mincor meeting. When challenged by Pryor, Humann offered to show everyone at the meeting his diary to show how he fits everything in. Just for a lark, Briefcase sidled up after the encounter and asked whether the offer of a diary tour extended to the media. With good humour that was quite unexpected from an accountant, Humann whipped out what looked like a diary, but then thought better of it in case the contents appeared in Briefcase (something we would never do – fingers crossed division).

In any event, Humann won the encounter with Pryor hands down. The vote for his re-election, which Pryor opposed, was carried by a squillion to 26,000, or something like that. If the steam-powered calculator used by Briefcase could handle such low numbers the proportion of votes against Human appeared to be around 0.0001 per cent.

Now to the really crunchy bit, Pryor’s cat-from-the-bag. With all due respect to her and the commendable work of the ASA, what on earth has it got to do worrying itself about employee benefits?

Excessive director fees, outlandish option deals, and perhaps (just perhaps) over-worked directors might be an issue – but employee entitlements, that smells awfully of a socialist agenda when the single overriding interest of shareholders is to be paid dividends and watch the share price of their company rise.

Some shareholders may suffer from bleeding heart syndrome, but there’s an easy solution to that, the same one Kerry Harmanis suggested in previous weeks when Pryor entertained shareholders in Jubilee Mines – sell your shares and invest in something which better suits your social conscience, if in fact profit and corporate success is not what you’re all about.

As for worrying about the hours a director works, Briefcase says get real. Worrying about hours is an extension of the clock-watching disease that infects the civil service. In business time is not an issue, it’s whether you can do the job, and in Humann’s case the job at Mincor is being done pretty damned well.

n n n

ON the question of directors and corporate governance, is Briefcase alone in thinking that the current set of rules have been written by the same academics who wrote the Tax Act.

Last week’s Wesfarmers annual meeting was a classic example of bureaucracy running totally off the rails.

For more than two hours about 750 loyal shareholders in WA’s most successful company were bored witless while Trevor Eastwood and Michael Chaney droned through a procedure that seemed positively medieval. In fact, it might have been more enjoyable and understandable if it had been in Latin.

As with the earlier comments on Mincor, it seems people more interested in procedure than performance have grabbed corporate Australia by parts painful.

A set of rules has been written which the authors imagine will protect investors from rapacious capitalists. Wrong. All that has happened is that honest, successful and very shareholder-friendly companies have been made to jump through hoops to satisfy theoretical situations that will never arise.

In classic bureaucratic style a rule book entitled “one size fits all” has been written and, this is the key, the average shareholder no longer has a clue as to what’s going on, is being turned off from attending annual meetings because they’re so damned dull and can’t understand 99 per cent of what’s contained in the annual report of the company he or she co-owns.

If you doubt any of this, try to figure out exactly what the remuneration and performance package is of BHP Billiton chief executive, Chip Goodyear, or Rio Tinto boss Leigh Clifford. There are now so many twists and turns and variations in the options packages – all, we are told, in the interests of an informed market – that not even Albert Einstein could figure it out.

And that’s progress?

“The meaning of life is that it stops.” Franz Kafka.


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