New Mirvac CEO to take helm next month
Diversified property group Mirvac has moved to placate investor dissent by announcing the starting date of its new chief executive Susan Lloyd-Hurwitz will be November 5.
This is about six weeks earlier than first hinted at in mid-August, when the chairman James MacKenzie surprised shareholders with news that the long-standing incumbent Nick Collishaw was to be replaced.
Investor response to Ms Lloyd-Hurwitz's starting date was positive, with the shares rising 1.1 per cent to $1.43.
That earlier CEO action had raised the ire of fund managers who staged a war of words with Mirvac, which included seeking the dismissal of Mr Mackenzie.
One of the most vocal investors has been the managing director of Maxim Asset Management, Winston Sammut, who said today the announcement of Ms Lloyd-Hurwitz's starting date was due to market pressure.
"I think that happened as a result of the pressure brought to bear by a number of institutions who have expressed concern about the tenure of Mr MacKenzie as acting chief executive and managing director," Mr Sammut said.
"But it doesn't detract from concerns about the process and delivery of the message to investors by the chairman Mr Mackenzie.
Mr Sammut added that he was "encouraged by the growing level of support from both small and large shareholders that has been received over recent days".
The shareholders' complaints centred on the apparent lack of clarity as to why Mr Collishaw had been replaced.
This support includes the head of Resolution Capital, Andrew Parsons, among others.
In a strongly worded email last week that sparked the discontent, Mr Sammut said of particular interest was the fact that the announcement [of Mr Collishaw's replacement] was made less than one week before the release of Mirvac's financial result.
"Of greater concern to Maxim Asset Management, a Mirvac shareholder, was the chairman's reluctance not only to not engage in discussion about the change of group chief executive and managing director, also to effectively shut down discussion on any question directed at him at the result presentation," Mr Sammut's email says.
"In that regard, it needs to be pointed out that, having been in the industry for a long period of time, it is a very, very rare occurrence indeed for a chairman of a board to attend a result presentation.
"This of course leads me to question the reason for Mr MacKenzie's reason for being there particularly as he was unwilling to answer questions put to him. Accordingly, the event was not well received, from an investor point of view, and I believe did a lot of damage to the company."
But Mr MacKenzie said in a newspaper interview last weekend that he had been out talking to investors and that the decision to replace Mr Collishaw was difficult.
"In Nick you have a bloke who did a difficult clean-up job but there were other things that we were looking for," Mr MacKenzie said.
'Business as usual'
Amid the ongoing management discussions, Mr MacKenzie, together with the chief executives of Mirvac's development and investments, Brett Draffen and Andrew Butler, respectively presented at the 19th CLSA Investors’ Forum in Hong Kong, today with the key message that it is “business as usual” despite the controversial change in CEO – and that business is good considering the challenges.
According to CLSA's property analyst John Kim attending this afternoon's meeting, Mr MacKenzie presented the case that operations are on track in this interim period between chief executives.
Mr MacKenzie said Ms Lloyd-Hurwitz was “on board” with Mirvac's current strategy, and they expect to be focused on third-party capital partnerships and cost controls.
''Investors we talked to appear willing to defer judgment until Ms Lloyd-Hurwitz establishes herself as chief executive, but had been warming up to Nick Collishaw and were concerned about the processes that allowed this change to occur in this manner,'' Mr Kim says in a note to clients.
''We retain our 'underperform' rating, as we remain sceptical of additional costs and write-downs, but agree the business model needs tweaks rather than an overhaul, and the incoming chief executive brings a solid reputation.''