By Patrick Hatch
Myer's board has survived a showdown with major investor Solomon Lew, but suffered a bruising second "strike" against its executive pay as Mr Lew's agitating over the department store chain's poor performance gathered support.
Just over 37 per cent of proxy votes lodged before Myer's annual general meeting on Friday were cast against the retailer's remuneration report, up from 29 per cent last year.
Myer's faced another significant protest vote. Credit: Wayne Taylor
That second strike - a vote of more than 25 per cent against the remuneration report - opened the door for a motion to spill the board, with 35 per cent of shareholders voting in favour and 63 per cent against.
Despite failing to dislodge the board, the second strike is a symbolic win for Mr Lew’s Premier Investments, which has been a vocal critic of Myer after a $486 million loss last year, an almost 50 per cent fall in its share price, and the suspension of dividend payments.
In an at-times fiery meeting, Myer chairman Garry Hounsell batted away questions from Mr Lew’s proxies, while slamming Premier’s campaign as “vindictive” and disruptive to new chief executive John King’s attempts to revive the business, while leaving staff unnecessarily worrying about their future.
“It’s a travesty," he said.
Mr Hounsell accused Mr Lew, whose Premier holds 11 per cent of Myer, of trying to take control of the company without paying shareholders a proper takeover premium.
Ahead of the vote, Mr Hounsell defended the skills and experience of his under-siege board.
He said he led a “cohesive and aligned board, with the right skills and experience for the future and a focus on delivering value for shareholders”.
Despite his support, new director Lyndsey Cattermole, who was appointed to the board last month, only just cleared the 50 per cent hurdle to being re-elected, with 56 per cent of proxy votes backing her, while David Whittle was elected with 63 per cent support.
Myer chairman Garry Hounsell. Credit: Justin McManus
After a torrid year, Myer this month revealed that sales fell another 4.8 per cent in the first quarter.
“The past year has not been an easy one for Myer,” Mr Hounsell said. “We have listened to you, our shareholders, as well as our customers, suppliers and employees."
Mr Hounsell said Myer had “achieved a lot” to put Myer back on track, including the appointment of John King, formerly the boss of British department store House of Fraser, the redesign of Myer’s website, and store redevelopments and closures.
“We understand the challenges, we have a clear plan to address them and we now have the right leadership to build a better business that delivers for all shareholders,” he said.
There was disquiet from some of Myer’s large number of “mum and dad” retail investors ahead of the meeting – including some who paid $4.10 each for their shares when it floated on the ASX in 2009. On Friday, those shares were trading at 44¢.
“I came in at $4 and they’re worth nothing now, and the dividends have stopped - maybe Sol is the man to turn things around,” shareholder Charles Cannavo said.
The self-funded retiree hoped a change in directors could revive the business, citing Qantas as an example of a corporate turnaround fairytale under the right management.
“You can be an accountant ... but it’s chalk and cheese – you need the right people who understand retail," he said.
Another retail investor, Matthew Miles, said he came to the meeting “looking for a bloodbath”.
“I came here last year and Garry Hounsell … said he was not a patient man. Since then, it’s gone to hell in a hand basket," Mr Miles said.
“Solomon Lew seems a lot smarter, he has the history, and he seems to have more skin in the game.”