Rinehart vote gives Fairfax first strike

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This was published 11 years ago

Rinehart vote gives Fairfax first strike

By Clare Kermond

GINA Rinehart has used her voting power to force a first strike against Fairfax Media's remuneration report, maintaining her criticism of the company's board at its annual meeting yesterday.

Mrs Rinehart, Fairfax's biggest shareholder, also voted against a performance rights deal for Fairfax chief executive Greg Hywood, and swung her votes behind the re-election to the board of her friend and business associate Jack Cowin and the TradeMe founder Sam Morgan.

Fairfax CEO Greg Hywood and Jack Cowin.

Fairfax CEO Greg Hywood and Jack Cowin.Credit: Wayne Taylor

Fairfax's shares rebounded to close at 41¢ yesterday, up from a low of 35¢ on Monday.

Mrs Rinehart's votes were not enough to block Mr Hywood's $800,000 worth of performance rights, nor did her support for media analyst Peter Cox succeed in getting him on to the board. She also voted against the re-election of James Millar and abstained from voting on the re-election of Michael Anderson, both of whom were reappointed as directors.

According to new laws, a vote of 25 per cent against a company's remuneration report triggers a first strike, and a second strike at next year's AGM could result in a spill of the board.

But while Mrs Rinehart's representative at the annual meeting, Hancock chief development officer John Klepec, confirmed that she remained critical of the Fairfax board, her closest ally on the board, Mr Cowin, was more upbeat, saying he remained bullish about the company's future.

Accused during questions from shareholders of not having any ''skin in the game'', Mr Cowin said in fact he had bought 1 million shares in Fairfax last month and might buy more. ''I am bullish about the future of this company,'' he said.

Mr Klepec said at the close of the four-hour meeting that Mrs Rinehart was still critical of the board, but he would not comment on Mrs Rinehart's bid to get one or two seats on the board.

''How can we not be critical when we've lost so much money?'' he said.

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In a surprising development during the meeting Mr Corbett agreed to a deal by shareholder activist Stephen Mayne, who proposed that if the chairman cut his annual fee to $400,000, Mr Mayne would direct the Australian Shareholders' Association's votes in favour of the remuneration package.

Mr Corbett said simply ''yes'' to the proposition, which represents a cut to his fee of about 10 per cent, but he later pointed out that all of the directors' fees had been frozen for a few years.

Mr Corbett and the board endured heavy criticism from shareholders over the company's performance and the independence of Mr Cowin.

Mr Cowin told shareholders that he was sitting on the Fairfax board as an independent, despite acting as Mrs Rinehart's alternate, or stand-in, when she was unable to attend meetings of the Ten Network board, of which they are both directors.

''I am not an associate, I'm an independent director of Fairfax,'' Mr Cowin said. He said he had endeavoured to see if he could reach a resolution with the board over Mrs Rinehart's bid for a seat, but had been unsuccessful.

Mr Hywood defended the company's plans for surviving what he called ''a perfect storm of cyclical unrest and structural change''.

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He said while there had been tough decisions, including cutting nearly 2000 jobs, Fairfax was being transformed into a multi-platform media company for the future. Taking into account its digital publications, Fairfax's audience had grown by 50 per cent to reach 9 million.

''Our message … is that Fairfax will be a dominant force in what will be a predominantly digital future.''

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