WiseTech has named White’s chief of staff and career tech specialist Zubin Appoo as the next CEO. However, White is the one really running the show.
The appointment continues the push by the multi-billionaire to turn to trusted allies to stack his board and key executive appointments. It is understood Appoo’s name didn’t appear on any candidate shortlists, or even appear on the radar of headhunters when they were undertaking a global search on behalf of the former board.
White has a 36 per cent stake in the logistics software company, but 100 per cent of the control in its direction.
Appoo spent almost 15 years at WiseTech until August 2018, including as head of technology. From there he held a string of chief tech roles at health-based fintechs, before running the tiny NDIS-focused marketplace Find a Carer for 18 months.
There’s no doubting Appoo’s technical expertise, but he is unproven as a CEO or had any significant operational role. He’s now in charge of a top 15 ASX-listed company with global reach. WiseTech generates more than 70 per cent of its near $1bn in sales offshore and employs thousands of staffers around the world. It also has a complex cultural and governance problems that he’s going to be on the hook to manage. But White, increasingly the source of the problems, will have the final say.
In a statement, WiseTech said Appoo played a foundational role in the early growth of the software company in the period before its stockmarket listing. “A proven technology leader, Zubin has over 20 years’ experience in leading and growing teams that deliver strategic outcomes and commercialise market-disrupting products,” it said.
In a clear sign the CEO role comes second place to executive chairman, Appoo’s salary of $700,000 before bonuses will be less than half of the annual $1.7m that interim CEO Andrew Cartledge was being paid when he took on the top job last November. As executive chair White will be collecting around $1m annually.
Cartledge, the former chief financial officer, will move on to non specific role but retire as long planned at the end of this year. Appoo takes up the CEO role immediately.
Despite a promise to be leaders in innovation, White has repeatedly shown his reluctance to be challenged.
Since a string of allegations around his relationship with several women – both outside and with links to WiseTech – initially prompted the billionaire to step down to a consulting role given the reputational damage to the company. White then returned from a summer break with a new mission: consolidate power at WiseTech.
In April, when the 70-year-old White awarded himself a contract of up to 15 years as executive chair, we called out that he was sowing the seeds of WiseTech’s long-term mediocrity. Technology never stays still, and growth comes from being challenged and drawing in new ideas.
White forced out the board that challenged his behaviour, with directors resigning en-masse this year, including former independent chair Richard Dammery.
The appointment of a long-term White insider as CEO puts key WiseTech backer HESTA in a tighter spot. In May, the industry fund slapped WiseTech on a watch list around concerns over the cosy way White was running governance as well as his leadership.
Among concerns were the conduct and actions of the executive chair, the lack of independence of the WiseTech board and how it was handling leadership and succession.
Excluding White, among WiseTech’s six-member board, four are former long-term directors, including two former chairman of the tech company recruited this year. Only two joined as independent directors this month: US-based Roberto Castaneda and former media executive Sandra Hook.
Another fund, AustralianSuper, wasn’t waiting around. In March, it dumped its entire $580m stake because of corporate governance issues. So far this year WiseTech shares have stayed flat, but have missed the global upswing in tech shares and underperformed the broader market.
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Macquarie vote
It has now emerged some influential names were behind Macquarie Group’s first-ever shareholder strike last week.
Proxy firms including CGI Glass Lewis and Ownership Matters were among those advocating for a protest vote, but the bigger funds make their own minds up and do their own homework on when it comes to voting at annual meetings.
Among Australian funds, the $200bn-plus First Sentier voted against the bank’s remuneration report. The fund that used to be known as Colonial First State still backed the vote for more than $17m in restricted equity grants issued to Macquarie chief executive Shemara Wikramanayake. Likewise, well-regarded super fund Telstra Super hit Macquarie with a non-binding protest vote but also backed the equity grant to Wikramanayake.
Two of the biggest US pension funds, the $US368bn ($564bn) CalSTRS and the monster $US556bn CalPERS both lined up for a no vote against the remuneration report. Florida’s state-backed $US257bn SBA went a step further, voting against both Macquarie’s remuneration report and the grant to Wikramanayake. SBA cited “questionable inventive outcomes” in taking aim at the grant. The grant still secured more than 90 per cent of the vote.
The backlash on remuneration follows Macquarie having a string of run-ins with corporate regulator ASIC over the past year. The most significant of these was a blockbuster legal action claiming Macquarie failed to correctly report and fix its short-selling data over a decade. Other issues were around tougher conditions being placed on the investment bank due to compliance problems with its futures and derivatives trading platform.
Last week’s shareholder strike wasn’t resounding, coming in at just 25.4 per cent, nonetheless, it still passed. Remember, the vote needs 25 per cent shareholder support to get up. Still, Macquarie can’t risk a second strike, or it faces a board spill.
Anything getting into double digits shows there’s a serious issue with shareholders. For Macquarie, which prides itself on aligning its high pay packets to longer-term shareholder returns, it’s deeply embarrassing, particularly as a former Reserve Bank governor Glenn Stevens chairs the board.
Stevens last week conceded a significant number of shareholders felt the investment bank should have done more in curbing executive pay in light of the ASIC issues. Stevens argued the case drawing most attention, the short-selling legal action, occurred after the end of Macquarie’s financial year so it should be reflected in the current year’s annual remuneration. Still, he said: “We have to hear that feedback and consider it and take that on board as we move forward.”
Stevens said the issues with ASIC were not systemic and there had been a huge step-up in regulatory engagement.
“This journey never really ends. It’s a thing that you have to continually be working on,” Stevens said.
Macquarie still had friends in New York. The city-backed pension scheme that oversees five separate funds backed all Macquarie’s board-endorsed votes. So did the giant UK-based university fund USS. The voting disclosures of some of the world’s larger – as well as smallest funds – is another reminder that Australia’s industry funds talk a big game on stewardship but are perennial laggards when it comes to voting transparency. Many release information annually. Some industry funds like Hesta are now moving to quarterly voting updates, but that’s barely revolutionary when most significant global pension funds provide real-time voting updates.
The Future Fund is even slower on the late cycle financial year release. This means its proxy disclosures are current to June 2024.
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After a near eight-month global search that reached deep into Silicon Valley, Richard White has found someone to replace him as WiseTech chief executive: The person who’s been running his diary for the past few months.