Oh what a tangled web for online holiday booker’s board

Gary Weiss has skin in the Webjet game, but board members are bucking his push for seats at the table.

There was a time, years ago, when wanting to travel meant dealing with a travel agent.

Let’s call that year 1997. Back then, everyone wanted to go to Phuket, so your travel agent – Linda, an actual human being in a shop, with a fake tan and commission targets – would organise everything for you. This would take hours. Window or aisle? Six-hour layover? You’d end up in a hotel a “short walk from the beach”, which translated to a “3km trek through a swamp”.

Then, in 1998, Webjet arrived. Suddenly you could book your own flights. Cut out the middleman. Linda, of course, didn’t starve. She rebranded as a “luxury travel consultant” and started charging hedge fund managers three times as much to do precisely what she’d always done. Good for Linda.

So we love these online travel agencies. They’re cheap and easy and they get us to Bali for $200 aboard repurposed Soviet-era aircraft branded “Batik Air”. And because we love them, we ignore the screaming governance disasters behind the scenes.

Which brings us to Webjet.

Long-serving Webjet board member Don Clarke.

Five directors run the board. A neat little fiefdom. Leading them is Don Clarke, who’s been there 17 years. Seventeen. Years. Not at the helm, but on the board. Then there’s CEO Katrina Barry, about whom we’d love to say more – except we can’t because we’re not sure who she is. Or was.

Here’s why. A former executive named Meaghan Simpson has alleged in court that she was sacked for pointing out “irregularities” with Barry’s CV. Specifically: that Barry never practised as a lawyer, despite claiming she did; never held two stated directorships, despite claiming she did; and didn’t have 25 years of executive experience, despite claiming she did. Which is quite the hat-trick of embellishment, if true, although Webjet has completely squashed it with denials.

Shareholders whacked Barry for it anyway. At the AGM in ­August, 49.2 per cent voted against her bonus. Nearly half. Another 24.55 per cent voted against the board’s remuneration report, just shy of the 25 per cent needed for a dreaded “first strike”. Get a second strike and the board can be spilled.

Meanwhile, the business itself is struggling. Bookings are down 8 per cent. EBITDA down 9 per cent. Management’s also pulled a fast one on how they calculate ­bonuses. They ditched shareholder returns – you know, the metric that actually matters – and replaced it with TTV.

Allegations were made in court about Katrina Barry’s CV.

Total Transaction Value. That’s the big number you see when you book a fortnight in Rome for $6000. Webjet gets maybe $150 of that. Maybe. But it wants to use the $6000 number to measure performance. It’s like a waiter claiming he earned $3000 because that’s what the table spent. But he got $40 in tips and split it with the kitchen.

Enter Gary Weiss and BGH Capital. Together, they own 17 per cent of Webjet – $58m worth. The board, all five of them, owns 0.25 per cent. Less than $1m. Pocket change. Yet they’re running the company.

And so Weiss wants to put two people on the board: his son Daniel and a former Qantas executive named Andrew Taylor. Wouldn’t you? If you owned 5 per cent of something and watched a handful of people with barely any money on the table making increasingly bizarre decisions – including the purchase of a loss-making business called Locomote – wouldn’t you, too, want to stop them? Before they changed the performance metric to something even sillier, like “number of emails sent” or “biscuits eaten in meetings”?

So Weiss has been fighting them for months. Letters. Phone calls. The nominees were put forward in September. The board brushed them off. Weiss requisitioned an extraordinary general meeting to force a vote. Webjet wanted an independent recruitment firm. Weiss told them where to stick it. A compromise was ­offered, then rejected. And now it’s going to investors on Friday.

Gary Weiss wants to install his son and a former Qantas executive on the Webjet board. Picture: AP

And the board is campaigning hard against it.

Daniel and Andrew, they say, aren’t “independent”. Which is rich, because Don Clarke has been on the board for 17 years. Seventeen. You’re supposed to reassess independence after 10. He’s also a consultant for MinterEllison, the legal firm that acts for Webjet. Which is … well, it could be a perceived conflict of interest. Is that independent? Webjet didn’t reply to our questions about it.

Clarke’s worried about the “disproportionate influence” Weiss and Taylor might wield. As though there aren’t five other sentient directors sitting there with equal votes. And they’re independent. Yes, quite independent. So independent, in fact, that when the share price collapses – as it did in March, down 20 per cent – they feel it as a paper cut. Meanwhile, actual shareholders get hit by a truck.

The third reason is a pearl-clutcher about Weiss bypassing the internal recruitment process with a 249D notice. As though shareholder rights mean nothing. The 249D was literally invented for this purpose – to bypass boardrooms guarded by people who’ve been sitting there since the Bronze Age, like the knight guarding the cups at the end of Indiana Jones.

And finally, magnificently, the board thinks adding two directors would “destabilise” the company during a “critical strategic phase”. This, after major investors fled in March during the strategy update. After shareholders revolted at the AGM. After everything.