Lew playing the long game with Myer’s board of directors

Solomon Lew is restructuring Myer’s board by stealth rather than using brute force, as he moves the pieces in place to ditch the department store’s incumbent directors standing for re-election at this year’s annual meeting.

With Myer chairman JoAnne Stephenson giving notice of her resignation on Monday, Lew has now fought against and seen off two chairmen at the retailer.

Retiring Myer chairman JoAnne Stephenson.Credit: Josh Robenstone

Former chairman Garry Hounsell made his exit three years ago when Lew’s stake in Myer was only 11 per cent. Even with that, Lew managed to muster enough support from other shareholders to secure Hounsell’s scalp

With a much larger stake at his disposal now, Lew could have opted for the nuclear option. Instead, the retail billionaire has chosen to get some friendly faces a seat at Myer’s board, with two new directors joining the board.

The first is one of Lew’s oldest friends and business allies, Gary Weiss, who is technically counted as independent. He has ridden shotgun for Lew at various times over the years and was at one time a director of Lew’s listed retail company Premier Investments.

The second is the head of Qantas’ loyalty business, Olivia Wirth, who will understand who she answers to, given she needed the approval of Lew to take a spot on the Myer director ticket.

The head of Qantas’ loyalty program Olivia Wirth with former chief Alan Joyce. Credit: BIANCA DE MARCHI

But more on that later.

Had his Premier Investments voted against Myer’s remuneration package it would have been its second strike, triggering a motion to spill the whole board.

In a tactical shift, he is supporting the elevation of one of Myer’s existing old guard directors, Ari Mervis, to the chair.

The “refresh” of the Myer board means that Lew will have three of his approved directors (the two new faces and his own representative Terry McCartney) around the table and there will be three of the old guard.

[Solomon Lew] has eschewed being the aggressor in favour of being the gatekeeper, but the outcome is the same.

It is an elegant solution for Lew, a more subtle way to exert his influence without wholesale board carnage or any backlash from proxy advisers.

In doing so, he has eschewed being the aggressor in favour of being the gatekeeper, but the outcome is the same.

At various stages over years Lew has unsuccessfully sought the resignation of all directors, despite having less leverage to extract that outcome.

His next job will be to oversee who takes the job of Myer chief executive, given John King is set to resign over the next six months.

Headhunters have already begun the search, and while there is no suggestion from Myer or the Lew camp that Wirth might be a contender, her expertise in running Australia’s largest and most profitable loyalty scheme at Qantas would be a useful qualification at Myer, which has placed a strong emphasis on growing this business.

Active Myer one members increased to 4.1 million in the past 12 months, with new member acquisition up 36.1 per cent, according to Myer’s 2023 profit announcement.

The ambitious Wirth was overlooked to replace Alan Joyce as chief executive of Qantas, a role that went to Vanessa Hudson.

It was a two-person race at Qantas, but Hudson was the clear favourite of the major shareholders. History shows that the unsuccessful internal candidate often leaves an organisation in the aftermath.

Gary Weiss, one of Lew’s oldest friends and business allies.Credit: Sam Mooy

It could be that Wirth is just trying her hand at non-executive directors roles and the lack of retail experience would go against her. That said, Myer in the past has been run by people with no direct retail experience.

Meanwhile, Lew has tightened his grip on Myer at a time when retail companies are facing massive headwinds from the slowing economy, higher fuel and power costs and elevated interest rates.

Lew’s retail arm Premier is also feeling the effects of what is essentially a consumer recession. It recently reported a strong 2023 financial year but a slowing fourth quarter in sales.

With power comes responsibility. Lew can no longer sit on the sidelines, taking pot shots at Myer’s performance. Small Myer shareholders will expect Lew to make his mark on Myer from inside its tent.

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