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Myer chair Garry Hounsell in shock exit

The future of Myer and its CEO are in play, after chairman Garry Housell’s shock exit at the hands of shareholders.

Myer chairman has announced his departure just hours before the company’s AGM. Picture: Stuart McEvoy
Myer chairman has announced his departure just hours before the company’s AGM. Picture: Stuart McEvoy

Myer is facing a disrupted Christmas and a chaotic summer at the hands of its biggest shareholder, Solomon Lew, who on Thursday forced the resignation of chairman Garry Hounsell, won a first strike at the AGM and is now threatening a meeting in the new year to tip out the entire board.

The corporate blitz puts in play the future of Myer as well as its chief executive John King -- who has been battling the worst retail conditions in decades, the impact of the coronavirus pandemic on his stores and an increasingly belligerent Mr Lew who has recently turned his guns on his performance.

Smelling blood in the water from his victory to dislodge Mr Hounsell, which was only made possible when veteran funds manager and Myer’s second biggest shareholder Geoff Wilson changed his mind and voted against the chairman’s re-election, Mr Lew is demanding the entire board step down.

Mr Lew and his advisers will now begin to compile a list of candidates they will soon offer as alternative directors to the current Myer board, seeking Mr Wilson’s Wilson Asset Management’s support once again to give the billionaire retailer control of Myer after stalking the department store for more than three years.

Premier Investments, the fashion empire controlled by Mr Lew, is the department store’s biggest shareholder with a stake of 10.8 per cent and the billionaire has been a constant critic of Myer and its performance since he bought his stake in 2017.

The drama began hours before the Myer AGM was held on Thursday afternoon, with Myer surprising investors by announcing that given its two biggest shareholders -- Mr Lew and WAM -- did not support Mr Hounsell’s re-election the resolution would be withdrawn and he would step down. Mr Hounsell did not turn up at the virtual Myer AGM and it was chaired by acting chairman JoAnne Stephenson. Myer is now looking for a new chairman.

Ms Stephenson called for unity and an end to the public battles played out in the press, but any hopes Mr Lew would grab the olive branch rather than reach for his corporate pistols were quickly dashed when he demanded the rest of the directors follow Mr Hounsell out the door.

However, Mr Lew might not have won over Mr Wilson for a full spill of the Myer board at an extraordinary general meeting over summer, with the funds manager not convinced handing boardroom control to Mr Lew and his Premier Investments is such a good idea.

“We have no current plans of supporting an EGM,’’ Mr Wilson told The Australian late on Thursday.

Mr Wilson, who has a 7.8 per cent stake in Myer, was favourably disposed to voting against Mr Hounsell’s re-election to the Myer board on Thursday but at this moment believes turfing out the whole board could disrupt the retailer and its management at its peak trading period in Christmas.

“We believe Myer will benefit from clear air following a challenging period for the company. We expect that management can now stay focused and work towards delivering for shareholders during the Christmas season.”

Once it emerged earlier this week that Mr Wilson would switch his previous support for the Myer board and side with Mr Lew it became clear to Mr Hounsell he would need to step down.

“Ahead of today’s Myer AGM, it has become apparent that Myer’s two largest shareholders are not supporting my re-election and I will not allow my ongoing tenure as chairman to be a distraction to the hard work of the executive team,’’ he said in a statement Thursday morning.

But even without him at the AGM the drama of the day continued into the Myer shareholders’ meeting, where acting chairman Ms Stephenson revealed the lodged votes and said it was likely Myer would earn a first strike against its remuneration report. Myer later informed the ASX it had indeed earned a first strike, with a 33.6 per cent vote against the adoption of its remuneration. It also got a 32.9 per cent vote against the granting of equity performance rights to chief executive John King.

“What Myer needs now, more than ever, is stability,” Ms Stephenson said in her speech to open the AGM.

“A war of words in the media is damaging for customers, damaging for the Myer brand, and therefore damaging for you our shareholders.

“Through the challenging conditions presented in 2020 and looking to the future, each decision we make is in the interests of our customers, team members, and you, our valued shareholders.”

It failed to win over Mr Lew who trumpeted his victory against Mr Hounsell as a “green shoot” that Myer shareholders have long been waiting for.

“Mr Hounsell’s ousting signals to the entire board that their time is up,’’ said Mr Lew.

“In the interests of all shareholders, we expect the remaining Myer directors will now indicate their intention to step aside in an orderly manner or face an extraordinary general meeting at which they will be certainly dismissed.

“In Premier’s view, a global search for a new chairman is a waste of shareholders’ time and money.

“Myer is an Australian icon and it requires a board with proven Australian retail credentials and commercial experience, including key skills in property, information technology, e-commerce and logistics.”

Mr Lew said for the sake of all of Myer’s dedicated employees, its many hard working suppliers, its loyal but frustrated customers, and long-suffering shareholders the company needs to be restored to health by installing a new, independent board.

At the AGM Myer declined to offer a trading update and neither Mr Stephenson or CEO Mr King were available for interview.

Myer shares closed down 2.1 per cent, or half a cent each, at 24c.

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Original URL: https://www.theaustralian.com.au/business/companies/myer-chair-garry-hounsell-in-shock-exit/news-story/78345f889b740c76b3bbd04e86e5d8f7