Myer Directors Slashed, Fees Cut, Following Shareholder Revolt
Following weeks of intense shareholder pressure, struggling department store Myer has bowed to pressure by reducing its board numbers and slashing director fees.
Out are directors Lyndsey Cattermole AM and Julie Ann Morrison, who will retire from the board at its upcoming annual general meeting.
The remaining non-executive directors are JoAnne Stephenson, who has been on the board since 2016, Jacquie Naylor, who joined last year, David Whittle, who has been a director since 2015, and Myer chairman Garry Hounsell.
The move comes following pressure from major shareholder veteran fund manager Geoff Wilson of Wilson Asset Management.
Chairman Garry Hounsell told shareholders, “We have been considering the size of our board for some time. Following the decisions of both Lyndsey and Julie Ann to retire at the upcoming annual general meeting, the board will be reduced to five directors including the CEO and managing director.”
Myer shares were up 3 per cent at 24c each in late morning trade, following the announcement.
Also announced was the decision to reduce the Chairman’s annual base fee to $250,000, down from $300,000, while Myer’s remaining non-executive directors will see their annual base fees shrink to $100,000, down from $120,000.
“The decision to forego director fees for a period in April, and to receive reduced fees during May and June, were absolutely appropriate, and today’s announcement of a smaller board reflects the size of the business, our ongoing focus on costs, and the current operating environment,” Mr Hounsell said.
Mr Wilson on Tuesday wrote to Mr Hounsell calling for the retailer’s board numbers to be reduced.
“We believe it is appropriate for the board to reduce the number of directors and their fees in a necessary alignment with companies of a similar market capitalisation,” Mr Wilson wrote.
In response, Mr Hounsell said it was something the board had been considering for some time.
“The Myer board is extremely mindful of minimising board and other costs, and the board size must reflect the size of the business, and the ongoing focus on costs, especially in the current environment – which today’s announcement reflects,” Mr Hounsell said.
Citing confidentiality reasons, Mr Hounsell said he would not comment on Myer’s relationship with individual suppliers.
“What I can say is that Myer must constantly evolve its merchandise range to respond to customer demand. Most recently, during COVID-19, we’ve seen significant increases in customer demand for some categories and brands, and decreases in others, and Myer must adjust its range accordingly,” Mr Hounsell said.
“Myer has maintained the support of its merchandise supplier base and continued to pay its merchandise suppliers either according to existing contract terms, or better.”
Billionaire Solomon Lew, who stands as Myer’s largest shareholder with an 11 per cent stake, took aim at Mr Wilson earlier this month for supporting the Myer board.
“These results are also to the great discredit of Geoff Wilson. The arrogance displayed by Mr Wilson in backing a failed accountant as chairman of Myer over the wealth of retail experience in Premier is breathtaking,” Mr Lew said after Myer posted a full-year loss of $172.5m for the 2020 fiscal year, the second-biggest loss in the company’s history.
“Mr Wilson should now acknowledge that the continued failure of Myer is at least partially his own fault and his investors should hold him to account for the losses they have sustained and will continue to endure unless there is immediate change.”