Fairfax chairman Roger Corbett defended his performance, and that of his fellow board members, yesterday morning under fiery questioning at the company’s annual general meeting in Melbourne.
Fans of the dead-tree editions of The Sydney Morning Herald and The Age will draw little comfort from CEO Greg Hywood’s pronouncement that the digital-only future could be only three years away.
‘We will produce papers so long as there is a profitable demand for them,’ he said. ‘To subsidise the metro business from any other business is not part of our strategy… The future will be predominantly digital rather than print.’
Shareholders speaking from the floor expressed frustration at the company’s recent acquisition of old media assets, its dwindling share price – which has halved in six months to 38 cents – and the poor relations between the board and the company’s largest shareholder, Gina Rinehart.
Around 80 per cent of proxy voters supported the generous remuneration package for Fairfax executives – representing a significant 20 per cent protest vote.
Former Labor politician and veteran Fairfax shareholder Chris Schacht, who described Rinehart as the ‘elephant in the room’, decried the impact of the public stoush between Corbett and the mining magnate on shareholder confidence. He said the company’s performance over recent years had been ‘appalling’. ‘The absolute diminution in shareholder value in this company is extraordinary,’ he said.
Of the opposition to granting Rinehart a seat on the board, Corbett said: ‘This has not been a Roger Corbett issue – this has been a board issue. The board is absolutely unanimous in its position on Mrs Rinehart.’
While praising Rinehart’s success in selling minerals – and welcoming her 14 per cent shareholding – Corbett said allowing her onto the board would not be in the interests of all shareholders.
Stephen Mayne, now a policy officer at the Australian Shareholder Association, read a long extract from a swingeing opinion article on Crikey by Eric Beecher accusing Corbett of ignoring advice about the growth of online advertising. He also pressed Corbett to say whether decisions to acquire the Rural Press stable while selling off shares in the highly profitable Trade Me business were correct in hindsight.
Corbett said he did not recall the incident described by Beecher and that decisions about asset acquisitions and sales were made in the best interests of shareholders at the time. ‘Everyone can be wise with the benefit of hindsight – including you,’ he told Mayne.
While acknowledging the share price is of ‘immense concern’, Corbett was looking on the bright side: ‘Fairfax publications now have more readers than ever before and we are managing the transition of audiences to digital better than almost any newspaper company in the world’.
He said the company had conducted a detailed analysis on the pros and cons of de-merging the company earlier this year – including selling off the metro and radio assets – but this was not judged [to be] in shareholder interests. As for the future, he said: ‘We are not ruling anything out’.
His speech and Hywood’s both drew tepid rounds of applause from the crowd. Shareholders, currently munching on sandwiches while reading free copies of the Newcastle Herald and Border Mail, will vote this afternoon on whether to accept the remuneration report and whether media analyst Peter Cox, who is not supported by the board, should be elected as a director.
