Another proxy firm has rejected Solomon Lew pick Terry McCartney for the Myer board

A second proxy firm has come out against Solomon Lew’s attempt to get Terry McCartney appointed to Myer’s board.

A second proxy firm has come out against Solomon Lew’s choice for Myer’s board. Picture: Britta Campion

Billionaire retailer Solomon Lew’s bid to get one of his candidates on the Myer board has been dealt a second blow from an influential proxy firm after CGI Glass Lewis recommended to its clients they vote against the election of Terry McCartney.

CGI Glass Lewis said the appointment might not be in the interest of Myer shareholders and labelled Mr Lew’s candidate a “dissident” nominee.

Its decision follows a similar recommendation from Institutional Shareholder Services last month and makes the path for getting Mr Lew’s director elevated at this month’s annual general meeting even harder.

Mr Lew is using his Premier Investments’ 23 per cent stake in department store owner Myer to grab a director’s seat and has put up Mr McCartney – a veteran department store manager who is a non-executive director of Premier.

Premier Investments chairman Solomon Lew. Picture: David Caird

CGI Glass Lewis issued a report to its clients on Tuesday arguing that while Mr McCartney, a former boss of Myer Grace Bros, was an experienced executive with a long track record overseeing retail operations in Australia, Premier had not offered any arguments or evidence to suggest the incumbent Myer board lacked sufficient retailing experience.

“Without a stronger case outlining how Mr McCartney’s appointment to the board might address some outstanding issue of concern or perceived inadequacy, we question whether it is in the best interests of all shareholders to support his nomination at this time,” the CGI Glass Lewis report said.

The proxy report raised concerns about a perceived conflict of interest that Mr McCartney’s appointment to the Myer board, while being a director at Premier which owns fashion and apparel arm Just Group, could present.

“We are somewhat concerned that Mr McCartney’s appointment to the board could lead to actual or potential conflicts of interest, given that he also serves as a director of Premier and Just Group, which operate apparel and accessories brands in some of the same markets as Myer brands,” it said.

“Mr McCartney’s positions on the boards of Myer and Premier/Just Group would require the board to adopt appropriate protocols to manage actual or potential conflicts of interest and the sharing of commercially sensitive information, which could potentially hamper board deliberation and efficiency, in our view.

Terry McCartney during his time with Myer Grace Bros.

“We are also somewhat concerned that Premier/Just Group may have interests in Myer, including potential strategic interests, that may not be aligned with the interests of other shareholders.”

A spokesman for Mr Lew said it was “stunned” by CGI Glass Lewis’ recommendation against Mr McCartney joining the Myer board.

The spokesman lashed out at the proxy firm.

“CGI Glass Lewis has somehow managed to accuse Terry McCartney of being a “dissident” nominee director while also noting his failure to criticise the performance, strategic direction and governance of a board he hopes to join,” he said.

“In the notice of meeting, the Myer board chose not to make a recommendation to Myer shareholders on how they should vote their shares on Terry’s election to the board.” On September 15, Myer chief executive John King told the Australian Financial Review that “any shareholder with such a large stake deserves a board seat”.

The spokesman for Mr Lew said CGI Glass Lewis “must believe that they know better than Myer’s largest shareholder, the Myer board and the Myer CEO”.

“Terry is an accomplished retailer with more than 40 years’ experience. In fact, he is the only director with department store experience standing for election at the Myer AGM.

“Smart shareholders will make their own decisions,” the spokesman said.

The Myer annual meeting will be held on November 10.