Chris Ellison’s successor to be unearthed from new Korn Ferry process, exit timeline torched by new board
Chris Ellison walked into the MinRes AGM through the front doors unlike last year, when he entered through an underground carpark. He will be staying on longer after a succession agreement was binned by chairman Mal Bundey.
The Mineral Resources succession plan for chief executive Chris Ellison has been scrapped and he will run the business indefinitely with a mandate to find a talismanic CEO modelled after himself.
Mr Ellison was due to depart by April, but now appears set to stay on at least until well into 2026.
Chairman Mal Bundey broke the news to shareholders on Thursday, ending speculation as to whether Mr Ellison would meet his 18-month exit deadline set in November last year.
“Chris and I are fully aligned that this leadership transition must be a rigorous, well-managed process rather than an ‘event’, which it had become. A CEO and founder transition should never be treated as a single day in the calendar. It is not about simply searching for and naming a successor – it is about identifying the right person but also putting in place the organisational structures, resources and support to ensure they will succeed,” Mr Bundey said.
It is Mr Bundey’s first annual general meeting as MinRes chairman, and a new-look board greeted shareholders in Perth.
Mr Ellison walked into the AGM through the front doors of the headquarters of the West Coast Eagles football club, unlike last year when he entered through an underground carpark.
He admitted the past 12 months had been incredibly tough but he would continue to ignore the “noise” over his past sins, and urged shareholders to do the same.
“There’s no doubt the last 12 months have been incredibly tough, tough on the business, tough on me personally, my family, I thank my wife and kids for that support that I’ve had,” he said, with a nod to the related-party dealings and offshore tax scheme he participated in.
“I very early in the piece decided I just wanted to do what I do best. I’ll ignore all of the remarks that are coming at us. You can’t fight that. All I’ll do is make sure we continue to run the businesses we have for the last 30 years, and we’ll continue to do what we do good and that’s delivered to our shareholders.
“That’s our focus going forward, and that’s never going to change, no matter what happens.”
Mr Ellison, the biggest shareholder in MinRes with an 11.5 per cent stake, has regained his billionaire status and last week buoyed his chances of staying at the helm of the resurgent company after extracting a rich price for a minority interest in its lithium mines.
“While the former board had announced a target date for succession, the support program for this was outdated and, in our view, could not confidently deliver the intended outcomes of a smooth transition without creating unnecessary risk for the company and its shareholders,” Mr Bundey said. “This is especially the case in founder-led businesses, where the founder serves as the central pivot for decisions and strategy.”
Mr Bundey admitted to being emotional at the start of the AGM and acknowledged the presence of Mr Ellison’s wife, Tia, in the crowd. The meeting was closed to media and Mr Bundey and Mr Ellison declined to answer questions.
Mr Ellison told shareholders he was insistent upon finding a candidate that could match his vision in the Korn Ferry-led process.
“I’m not getting any younger, and it’s nothing that’s accelerated by the news, but just time for me to make sure that we’ve got someone else stepping into the breach that can continue this forward,” he said. “We’ve got a great management team in the business, and we’re going to make sure that this thing’s around in 40 or 50 years time.”
MinRes shareholders voted in favour (about 82 per cent) of a share entitlement plan for Mr Bundey who over the next three years can acquire 780,000 shares at $25.40 apiece. He is now in line for a massive windfall but will need to fork out $19.8m to take up the full entitlement.
Under Mr Ellison’s endorsed rights and performance plan, he stands to earn $6.55m including a base salary of $1.6m.
The company unveiled plans for a detailed review of its leadership structure on Thursday.
The Australian reported on November 12 Mr Ellison was expected to remain at the helm for at least all of 2026 with a long delay anticipated in the conclusion of an Australian Securities & Investments Commission investigation.
MinRes on Thursday foreshadowed Mr Ellison playing a key role in the review.
Mr Bundey again hosed down speculation of a capital raising, which looks increasingly unlikely in light of its 48 per cent share price rally this year, but acknowledged more work was needed to strengthen the balance sheet. The company has not ruled out additional asset sales, which could include the mothballed Bald Hill lithium mine.
Australia’s biggest superannuation fund, AustralianSuper, last week surpassed L1 Capital as MinRes’s second-biggest shareholder, and has claimed it is back on track.
Mr Ellison spoke passionately about the Onslow Iron project and its capacity to boost cash flow for MinRes.
He spoke bullishly about lithium, where MinRes and its partners have capacity to ramp up production after scaling back operations during a prolonged price downturn.
Lithium prices have doubled in recent months and China’s Ganfeng, which owns the other 50 per cent of its Mount Marion mine in WA, expects the upward trend to accelerate.
Mr Ellison said MinRes sold a spodumene concentrate cargo at $US1250 a tonne in the past 24 hours compared to the $US600 a tonne it was fetching in early June.
Liontown Resources reported on Thursday that it sold a cargo at auction for the equivalent of $US1254 a tonne for 6 per cent lithium spodumene concentrate. Spodumene prices peaked at around $US8000 a tonne early in 2023 before a steep fall.
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Originally published as Chris Ellison’s successor to be unearthed from new Korn Ferry process, exit timeline torched by new board
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