Diesel difference of opinion more than a Hick-up; Woeful Post won’t hurt chief’s bonus too much
Careful of whiplash while trying to follow the burst of executive resignations at Andrew Forrest’s iron ore empire this week, starting with CEO Fiona Hick and chief financial officer Christine Morris, who appear to have left as a package deal. They were followed on Friday by Guy Debelle, a former RBA deputy governor, whose very polite and wholly unconvincing reason for leaving involved absolutely nothing to do with the departures of Hick and Morris (sure!) and instead had something to do with being unable to juggle his responsibilities at Fortescue Future Industries with that of a vanadium mining company, Tivan, where he’ll soon join the board. Oh, go on, Google what the hell vanadium even is.
Forrest said Hick’s departure, after the slimmest of tenures (six months), turned on a difference of opinion over the company’s green transition, and it’s Margin Call’s understanding that a sticking point in that discussion was the generous heavy vehicle subsidies that Fortescue receives annually from the federal government.
These are rebates given to companies that consume diesel away from public roads, returning 47.7c for every litre of fuel used. Forrest has been calling for the rebate to be scrapped for large energy and mining companies since 2021.
This while they’re worth hundreds of millions of dollars to Fortescue, which soaked up 633 million litres of diesel in the 2023 financial year, and 700 million litres in FY21.
Of course, Forrest can’t campaign against the scourge of worldwide fossil fuel subsidies, as he did during a rather loopy, fire-and-brimstone Power Point presentation at the Boao forum in Perth on Wednesday, while claiming the same rebates and egregiously polluting the planet himself. And while neither of the major political parties have shown much enthusiasm for phasing out this program, the belief is that Forrest was very much in favour of his company shunning it henceforth, or at least soon, at no small cost.
Hick and Morris, perhaps thinking of the shareholder value, seemed to have taken an opposing position. Or maybe they just reckoned that Forrest’s vision to produce 15 million tonnes of green hydrogen by 2030 is, in the words of another rich do-gooder, Berry Liberman, a “crock of s..t”.
As it happened, Forrest took a call on Friday with The Australian’s Business Editor, Perry Williams, and List Editor John Stensholt, who kindly put the question of this stalemate with Hick on the diesel rebate to him directly.
After a noticeably lengthy pause and some audible hesitation, he said: “Um, so, great question,” and then proceeded to not answer the question at all. But he did praise Hick a bunch and suggested it was Morris who “really was pushing hard against what we were trying to do”.
Moving on
And while we’re on the subject, someone else clearly moving on from Twiggy is his estranged wife, Nicola, now said to be Australia’s second-richest woman (outdone only by Gina Rinehart).
The 60-year-old has set up a series of companies to control her considerable interests, the latest being Bowerbird Blue Pty Ltd, which lists her as the sole shareholder, with the three children – Grace, 30, Sophia, 28 and son Sydney, 23 – down as directors.
That’s after she already set up Coaxial Private and Coaxial Ventures in June to smoothly take control of 50 million Fortescue shares. The latter vehicle controls the former and her children are directors of each company.
Meanwhile, Forrest has also been bedding down her new waterfront life in Sydney, undertaking nearly $700,000 in renovations to her Point Piper mansion, which sits at the other end of Wunulla Rd, close to Lucy and Malcolm Turnbull (a director of Fortescue Future Industries).
Woollahra Council green-ticked those plans last year in addition to two other revamps undertaken since 2019, when the pile was purchased by Minderoo Pty Ltd for $16.3m. No mortgage required, of course, with the renovations seeming to total $2.3m.
Back of the envelopes
Dismal results out of Australia Post on Thursday morning, with chief executive Paul Graham delivering a $200m loss and warning of a “horror movie” of further devastation to come. Shortly after he held a company-wide town hall where a question was lobbed about bonuses – namely whether they might still be in the offing.
Graham didn’t commit either way, saying it was a matter that would be examined by the business, but it certainly didn’t sound like anyone’s going to be gifted a Cartier watch this year.
As for Graham, he wouldn’t be overly concerned about bonuses when only 25 per cent of his own are tied to the financial performance of Australia Post. The remainder, set by the board, lean into the abstract: whether the strategic priorities were met, whether customers were still loyal, workplace safety, efficiencies, etc. The letters business can basically tank, which apparently it will, and he’ll still be able to buy a Targa 4S.
We know because in the 2022 financial year, Graham and his executives were given 85 per cent of their maximum variable pay, while revenue fell, and at that time Graham was entitled to a fixed salary of $1.46m (he started part way through the financial year so he took a bit less).
Post’s annual report should be tabled in October, and we imagine his fixed pay will be slightly higher. The maximum variable component stands to be up to 100 per cent of whatever that figure might be, still with only a quarter tied to financial results.
Back of the envelope? He’s looking at a payday in the neighbourhood of between $3m and $4m, in a year when the company lost $200m.
Still in demand
Two months ago, Susan Redden Makatoa was abruptly let go as an executive VP at Edelman Australia during a restructure that was clearly initiated from afar. That much was obvious because cavalierly slashing jobs from the other side of the world can wind up hobbling a business, and we’re hearing revenue per month has halved since Makatoa’s departure, along with that of Michelle Hutton, an APAC vice-chair at Edelman who exited two weeks earlier.
In Makatoa’s case, there was no shortage of supporters wishing her well on LinkedIn, one of whom was Domestique chairman Ross Thornton, whose corporate consultancy is in late-stage discussions to be bought out by Morrow Sodali. And sure enough, the smart money tells us that’s where Makatoa is heading next, thanks to Peter Brookes, now of MS, who heard Makatoa was cut loose and looking for work.
Enter Thornton again. He runs Temple Executive Search as a side hustle and used to work with Makatoa at the recruitment firm. The way it goes, Brookes tapped Thornton to lasso Makatoa, and it looks like she’ll be setting up a corporate practice under the MS banner.
Meanwhile, Edelman appears to be decaying like it’s got a half-life.
Word is that more than a dozen people – up to 20, we hear – have split from the firm during the winter alone.
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