Billionaire Mike Cannon-Brookes set for win on AGL Energy board shake-up
Mike Cannon-Brookes is poised to win his stoush with AGL Energy, with all four candidates put forward by the billionaire in line to join the power giant’s board.
Mike Cannon-Brookes is poised to win his stoush with AGL Energy, with all four candidates put forward by the billionaire in line to join the power giant’s board.
Ahead of AGL’s annual general meeting on Tuesday, sources said the businessman was likely to prevail in the battle against chair Patricia McKenzie with the quartet of Mark Twidell, Kerry Schott, Christine Holman and John Pollaers joining as new directors.
Only Mr Twidell had been endorsed by AGL, with the three others rejected due to a lack of experience and skills to implement its strategy. The green activist, AGL’s largest shareholder, has staged a high-profile campaign through his Grok Ventures vehicle to refresh the board amid a broader effort to accelerate a transition to renewables.
The election of all four directors at the Melbourne AGM – which requires 50 per cent of votes cast – would expand the board to nine members and raise new questions over the longevity of Ms McKenzie as chair.
The new directors are expected to focus on finding a new chief executive to lead the company, boost the unity and stability of the board and accelerate the company’s green push while making practical steps to put its carbon transition action plan in place. One director told The Australian they were also concerned by the loss of AGL management, with talent walking out the door after the demerger was dumped.
Questions are also expected to be asked by shareholders over the board’s rejection of two takeover bids by Mr Cannon-Brookes and Brookfield in February at $8.25 a share and $7.50 respectively.
Brookfield then teamed up with private equity player EIG and subsequently switched its attention to AGL’s chief rival, Origin Energy, with a $18.4bn bid disclosed on Thursday. Origin managed to extract three offers, the highest of which was pitched at a 55 per cent premium, suggesting AGL’s board may have been able to coax a much higher price out of its Canadian suitor.
The board shake-up suggests Mr Cannon-Brookes’ Grok Ventures should win another high stakes battle with the 185-year-old utility after previously derailing its demerger, sparking the exit its chief executive Graeme Hunt and former chairman Peter Botten. Chief financial officer Damien Nicks is AGL’s interim CEO.
Proxy advisers – who collectively influence about 30 per cent of AGL shares on issue – had backed Mr Twidell, Ms Schott and Ms Holman. Support for Mr Pollaers had been weaker.
The Australian Shareholders Association (ASA) also weighed in, backing Mr Twidell and Ms Schott, but confirmed on Friday it would wait until the AGM to decide if Ms Holman and Mr John Pollaers should also make the cut. “We look forward to the board being determined and the directors being able to knuckle down and work together to bring about the best decisions and strategy execution for the company,” the ASA’s Rachel Waterhouse said.
Ms Holman, a director of Metcash and CSR, is expected to relinquish a board position should she be elected election due to workload concerns.
Despite the expected rout, AGL expects strong support for a non-binding vote on climate, a key battleground with Grok as it works to retire large coal stations at Loy Yang in Victoria and Bayswater in NSW’s Hunter Valley.
Grok has told shareholders to vote against AGL’s climate plan this year, saying it targeted a strategy that aligns with a 1.8 degree global warming target rather than a 1.5 degree goal.
However, AGL said the 1.5 degree scenario was difficult for the power sector to deliver and meant all coal would need to be retired by 2031, requiring 100 gigawatts of additional capacity by 2030 and some 270GW of supply and over $180bn respectively by 2050.
AGL was hit by a backlash on climate change at its 2021 annual meeting after more than half of the company’s investors demanded steeper cuts to its carbon emissions, a result hailed by Grok as a defining moment for Australia’s climate ambitions.
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