MacKenzie’s Nine-year itch at the Big Australian

Cartoon: Rod Clement.

A potentially transformative concept has emerged from this week’s meetings in Sydney and Melbourne between activist hedge fund Elliott Management and its fellow investors in ­chairman Ken MacKenzie’s BHP.

Some have dubbed it the “MacKenzie Doctrine”.

Margin Call gathers that the new BHP chair has indicated in private meetings with some investors that he will implement a nine-year limit on directorships.

For now, it’s not clear whether it is official policy at the Big Australian, a more flexible guiding principle for the new chairman, or something closer to wish fulfilment from the global miner’s investors keen for it to move conclusively out of the Jac Nasser-era.

MacKenzie’s BHP recently flagged it would take a “robust process” to board renewal.

Bringing fresh perspectives onto the BHP board remains a priority of billionaire Paul Singer’s Elliott, even after last month’s rejig, in which Business Council of Australia president Grant King and Shell veteran Malcolm Brinded departed, to be replaced by Wesfarmers’ CFO Terry Bowen and former BP exec John Mogford.

The nine-year limit would provide a neat formula to allow MacKenzie to get on with the boardroom spring cleaning.

Under such a limit, former Newmont Mining Corp boss Wayne Murdy would signal his resignation in the next six months or so.

It would also be likely that two of Murdy’s fellow directors Carolyn Hewson and Malcolm Broomhead — both of whom were speculated as MacKenzie’s rivals to replace former ­chairman Nasser — would ­indicate their departure from the boardroom by the time of next year’s AGM.

And it would mean that in a little over a year, the board would have been thoroughly rebuilt in MacKenzie’s image, all under ­Elliott’s intense gaze and ­probably in time for the selection of CEO Andrew Mackenzie’s successor as chief executive — a subject the potash-wary hedge fund is sure have a few ideas about.

Spring gardening

Come December, Commonwealth Bank wealth executive Annabel Spring, 47, will have plenty of time to tend the verdant garden buffering her Centennial Park mansion.

But for now, the extent of Spring’s final payout after eight years at the Ian Narev-led bank is in the hands of her hard-marking chairwoman Catherine Livingstone.

Spring, who last financial year was paid $2.1 million after CBA execs forewent short-term bonuses, is required to give six months’ notice, but will exit at Christmas, giving her three months’ pay of about $500,000. The year before she was paid $3.2m.

Her replacement, Michael Venter,takes over with a different title to that of Spring, which could indicate a redundancy for the controversial wealth exec.

According to the CBA annual report, if Spring’s employment is terminated she’s not entitled to any short or long-term bonuses. But if she is “retrenched”, payment of benefits is at the board’s discretion.

CBA’s remuneration committee is led by Livingstone and also comprises David Higgins, Launa Inman (who is leaving at the AGM) and Andrew Mohl (who is apparently hanging around until the end of next year).

Awaiting their determination is the fate of Spring’s 91,000-odd long-term reward rights that have not yet vested but may be paid out if Livingstone flashes the green light.

As far as we can, tell she’s also got almost 30,000 CBA shares, worth about $2.2m.

Park life

Regardless, we don’t expect to see Spring falling below the breadline.

Less than two years ago the banking exec and her Macquarie banker husband Peter Stokes, who has worked at the Millionaires’ Factory for almost three decades, upgraded in Sydney’s eastern suburbs, paying $9.8m for a mansion on Lang Road in Centennial Park.

Plenty of possums in that neck of the woods.

As far as we can tell, they have no mortgage on the house. Maybe they paid cash?

Their neighbours up until recently were media royalty David and Skye Leckie, who have just sold their home Lactura after a year on the market.

The Leckies had already moved into their nearby new pile long before the home was sold, and rented out the mansion to 80s pop sensation Boy George while he was in Oz shooting The Voice for Leckie’s old free-to-air rivals at Nine.

Spring, we hear, is a Culture Club fan from way back.

Spring and Stokes’ new neighbours now that the singer has left is ragtrader Nick Kelly, founder of the Industrie fashion label, who bought the Leckie mansion in July for about $10m.

The always hospitable Spring will now have time to have Kelly over for tea.

CBA insurance policy

Speaking of CBA director Andrew Mohl, now that CommInsure and Sovereign have been sold in Australia and NZ respectively for a $300 million loss, what is there left for the former AMP boss to contribute to the bank’s governance?

Earlier this month, it was announced that Mohl would stay on the board for another year.

The bank underlined the contribution he was making to the insurance sale process that was then afoot.

“Mr Mohl has extensive insurance-related experience and is providing valuable strategic insight to the board as the bank undertakes a review of its life insurance business,” the bank said.

So now that the business unit has been flogged earlier than expected, will he stay on?
Seems so.

Even without a life insurance business, a Mohl-shaped board vacancy would not be helpful with the joint in its current, persecuted condition.

Former Westpac exec Rob Whitfield has joined to fill one of the seats being vacated by former Billabong CEO Launa Inman and novelist Harrison Young at the AGM, but as we told you last week, former Reserve Bank of Australia governor Glenn Stevens changed his mind about joining Livingstone’s board.

Blue chip director recruiting has rarely been as fraught.

Like old times

The $3.8 billion sale of CommInsure by CBA to life insurance giant AIA must feel a bit like old homework for former MacBanker and PBL boss Peter Yates.

The one-time deal-maker keeps a low profile on the board of AIA as a non-executive director alongside former Telecom New Zealand boss Theresa Gattung, who chairs the group.

Yates chairs the insurer’s risk committee and thus played a strong hand in deliberations over the CommInsure buy as the lead director on the deal, which we hear was two years in the making.

While Narev used JPMorgan for advice on the transaction, it is believed AIA used the services of Deutsche Bank for the deal, as Yates’s old shop Macquarie missed out this time around.