By Colin Kruger
Fletcher Building chairman – and former Commonwealth Bank CEO –Ralph Norris might be looking for divine intervention after unleashing three downgrades of its building and infrastructure business in less than a year.
Especially since the latest embarrassment was unveiled right in front of shareholders at the Kiwi construction giant's annual meeting in Auckland on Wednesday.
Activist shareholder Bruce Sheppard, dressed as a priest, told Sir Ralph Norris: "Your penance seems appropriate and your confession seems sort of complete."Credit: Mags King
And divine intervention came in the form of maverick shareholder advocate, Bruce Sheppard, who showed up in priests' robes and wooden cross, conducting a Kiwi version of the Spanish Inquisition.
The Most Reverend Sheppard offered a wide-ranging critique of the company, overlooking the sheer ineptitude of its B&I division to acquisitions that have failed to deliver.
Fletcher Building chairman Ralph Norris got into the spirit of things: 'The sins and omissions of the past are not going to happen again,' he promised
"I have found that most shit happens in expansion … because when there are lollies on the ground, managers can't help but pick them up at any price," he said.
He then asked the assembled investors to vote for absolution or exorcism for the board's corporate soul – and specifically directors who happened to be up for re-election. There was obviously a bit of apathy, which led to a third voting option for those "who don't give a shit".
But Sheppard added a warning: "I must tell you if you don't give a shit, a shit is what you shall get."
CBD thinks there is a lesson in that for anyone who votes, or owns shares.
UGL chairman Kate Spargo.Credit: Steven Siewert
Norris, bless him, got into the spirit of things, variously referring to Sheppard as reverend, monsignor, your worship, your holiness and omitting Sheppard's self-description of "troublesome priest".
And Norris showed appropriate atonement.
Illustration: John Shakespeare.
"The sins and omissions of the past are not going to happen again," he promised. Sheppard offered absolution to laughter from Norris and the audience.
Norris and his board also submitted to self-flagellation by cutting their fees by 20 per cent for the year and forcing them to own at least 20,000 shares – which would have been more painful over the past year than self-flagellation – and say 10 Hail Marys.
Spargo's parting gift
The other good news for Fletcher Building investors was the appointment of a new chief executive to replace Mark Adamson who was sacked in July.
They didn't have to look that hard.
Fletcher's recently departed board member, Kate Spargo, roped in her former CEO at UGL, Ross Taylor, who became surplus to requirements last year when CIMIC acquired the business for $524 million.
The capitulation by UGL did not impress shareholders like Allan Gray who say the board gave away the company too cheaply.
Others were not impressed with the $7.6 million incentive that was in front of Taylor who received the payout when the deal went through.
He's on a pretty good wicket at Fletcher Building, too.
Taylor's base salary starts at $NZ2 million – a smidgen below his predecessor – with incentives that could add another $NZ5 million to his pay packet.
Spargo, UGL's chairman at the time of the takeover, left Fletcher Building's board last month to take up a board seat at CIMIC.
We can only assume Spargo didn't like the commute because as far as we can tell the money isn't any better at CIMIC and the ... ah ... legacy issues from its previous life as Leighton Holdings make Fletcher's problems look like a walk in the park.
Close call
The gods have also shown some mercy on embattled Telstra boss, Andy Penn, with competition czar, Rod Sims, confirming this week that the telco would not have to open its mobile network to competitors.
So maybe its Canberra's NBN migrane that brought Penn to our well-secured Parliament House on Wednesday skulking in the main hall with the schoolies.
To offer a bit more context, NBN boss Bill Morrow is now offering to play Santa with a pre-Christmas price cut for NBN customers. But he needs its customers – the service providers who service the NBN's unhappy customer base – to play ball and pass on the cuts.
Malcolm Turnbull's crew might be making Telstra – as the NBN's largest customer – another offer it cannot refuse in order to get the NBN's viability back on track.
Follow CBD on Twitter. Got a tip? ckruger@fairfaxmedia.com.au