Harvey Norman Board May Face Shareholder Coup
Harvey Norman is at risk of facing a second strike against its remuneration report, though the board is unlikely to be voted out by the proposed shareholder coup.
Following its first strike against its remuneration report last year, the Australian Financial Review has revealed that if more than 25% of shares are voted against the remuneration report on 27 November, it will trigger a vote to spill the board.
However, Gerry Harvey and other key executives would be unable to vote their shares to stop a spill meeting, though in the case that it does occur, Mr Harvey’s share ownership of 31.4% would be able to vote his shares.
In fact, combined with the 25% held by his related parties, Gerry would return to the board with his preferred directors onside.
Included in Gerry’s list of preferred directors are Katie Page, Lynette Harvey and non-executive director Chris Brown, who controls the 6.5% stake held by the family of Harvey Norman co-founder Ian Norman.
Despite the majority ownership, the Australian Shareholders Association, the Australian Council of Superannuation Investors and proxy adviser Ownership Matters have all recommended Harvey Norman retail investors to vote in favour of a spill meeting to appoint independent directors to the Harvey Norman board.
As covered yesterday by ChannelNews, ‘corporate pest’ Stephen Mayne is set to oppose managing director Katie Page, though many see his bid as merely symbolic.
Plus, just as predicted, the ‘left vs right shit fight’ has begun with Mr Mayne joining Alison Carabine on the ABC Radio News Breakfast show, labelling his bid as a revolt against the Harvey Norman board.
‘Shareholders are said to be planning a coup at next week’s annual general meeting in a bid to improve corporate governance and transparency.’
Shareholders currently hold 25% of the shares, with institutional investors holding roughly 18%.
ASA monitor Pamela Murray-Jones believes ‘independence is sorely needed on the board,’ claiming Gerry’s lack of tolerance to those who challenge him as an issue for the national retailer.
‘Culturally, Harvey Norman runs like a private family company dressed up to look like a public company.’
Ms Murray-Jones hopes that if a spill does go through it may prompt Harvey Norman to take shareholder concerns about executive remuneration more seriously.