Mining billionaire Gina Rinehart has struck a blow against the Fairfax Media board, voting against the company’s executive pay report after a torrid annual general meeting (AGM).
And in an extraordinary move, Fairfax Media chairman Roger Corbett accepted a challenge to take a pay cut this financial year in return for support from the Australian Shareholders’ Association (ASA) for the same report.
Fairfax Media suffered its first “strike” under recently introduced “two strikes” rules after Ms Rinehart, the chairwoman of Hancock Prospecting and Fairfax Media’s biggest shareholder, voted her 14.99 per cent stake against the remuneration report.
Ms Rinehart also opposed the award of performance rights to Fairfax chief executive Greg Hywood and the re-election of director James Millar.
However she voted for Peter Cox, a media analyst who has been highly critical of Fairfax and who stood for election as an independent board member.
Mr Cox’s nomination was opposed by the board and was not successful.
Ms Rinehart’s representative at the AGM, Hancock Prospecting chief development officer John Klepec, told reporters after the meeting that she remained critical of the company.
“How can we not be critical when we’ve lost so much money?” he said.
In a reference to blood doping allegations against disgraced cyclist Lance Armstrong, Mr Klepec said the shareholders “have more blood on the floor than you’d find in the US Postal Service campervan at the Tour de France”.
“There’s been no blood spilt at the board level,” he said.
Fairfax reported a $2.7 billion loss for 2011/12 after massive writedowns on the value of its metropolitan mastheads.
The media company is cutting 1900 jobs as part of a restructure and is pushing a message that it is positioning for a digital future but its shares remain around record low levels.
Ms Rinehart was not among the 100 shareholders who attended the meeting but her influence was evident.
Mr Corbett told attendees the board had worked hard to accommodate her request for two board seats but unanimously agreed that it could not.
“Arriving at this position the board needs to have regard for the rights, benefits and interests of shareholders,” he said.
ASA representative Stephen Mayne challenged board member Jack Cowin over his status as an independent director.
Mr Cowin, the millionaire founder of the Hungry Jack’s fast food chain, is a friend of Ms Rinehart and introduced her to Mr Corbett.
“I can’t work out why you and the board are all complicit in maintaining this absolute joke of a pretence that you are somehow sitting here today and presenting for election as an independent director,” Mr Mayne said.
Mr Cowin said he was not an associate of Ms Rinehart and Mr Klepec told the meeting that Mr Cowin’s board appointment “was not discussed with us.”
Mr Corbett and Mr Hywood repeated their message that they were positioning Fairfax for growth once a “perfect storm” of cyclical weakness and structural change in the media industry abated.
In response to ASA concerns that management had not suffered the same losses as shareholders, Mr Corbett agreed to reduce his 2012/13 fee to below $400,000 after Mr Mayne offered to vote 2.2 million ASA proxies in favour of the Fairfax remuneration report – reversing the shareholder group’s previously stated opposition.
Fairfax shares closed up three cents or 7.9 per cent at 41 cents.
