Myer investor and former founder of Swisse Vitamins Michael Saba says he’ll vote against adding Solomon Lew-backed candidate Terrence McCartney to Myer’s board because the move is not in the interests of shareholders.
Billionaire retail veteran Lew has ramped up pressure on Myer’s board over the past five years over concerns about underperformance of the company. He now has a stake of more than 20 per cent in the business and will make another push for a seat at the table at Myer this week through the nomination of former Myer Grace Bros boss McCartney.
But winning the required votes to install McCartney may be a difficult task for Lew, with proxy advisers CGI Glass Lewis and ISS recommending investors vote against the nomination.
Myer will hold its annual general meeting on Thursday. Credit:Justin McManus
Saba is the fifth-largest shareholder in Myer, with a stake of 1.3 per cent through his Happy Saba Group, according to Myer’s annual report. He told this masthead he did not believe McCartney had the “cultural synergies” to add value as a director.
“Terry McCartney is a good bloke – [but] not the right bloke,” Saba said.
“There is also massive conflict of interests for obvious reasons, in relation to Solomon Lew being a stakeholder and supplier of Myer… Terrence’s recommendation is not in the interests of shareholders.”
Saba said he would prefer to see more gender balance if a new director was to join the Myer board, which is currently made up of three men and two women. He plans to vote in favour of the company’s remuneration report, backing chief executive John King’s recent profit results.
Lew’s stake in Myer, through his retail vehicle Premier Investments, has crept up this year to 22.87 per cent. Despite Myer posting stronger numbers in 2022, he believes there is still a lot of work needed to recover the losses investors have seen over the past few years.
Premier has been forced to mount strong rebuttals to the proxy advisers – ISS and CGI Glass Lewis – after both recommended shareholders vote against the nomination.
Both advisers have argued that Premier had not put forward a strong enough argument about the skills McCartney would bring to Myer’s board that are currently missing. The Glass Lewis report also noted that the appointment could lead to actual or perceived conflicts of interest, given McCartney’s position as a director of Premier.
Premier came out swinging against the recommendations, saying it was “stunned” by the CGI Glass Lewis report.
“Terry is an accomplished retailer with more than 40 years’ experience. In fact, he is the only director with department store experience standing for election at the Myer AGM. Smart shareholders will make their own decisions,” a Premier spokesman said last week.
Other major investors appear unconvinced, though, with Investors Mutual telling The Australian Financial Review last month that McCartney’s nomination was a “distraction”.
The outcome of the vote will likely come down to how Myer’s retail shareholders view the situation. Lew has written to investors, highlighting that McCartney would bring specific department store insights to the board that no other director has.
“Terry is committed to working in a collaborative and cohesive manner with the Myer board and takes his fiduciary duties very seriously, including in relation to managing conflicts of interest
[perceived or otherwise],” he wrote.
Investors will vote on the motion at Myer’s annual general meeting on Thursday afternoon. Myer’s shares have gained 5 per cent this month to sit at 63 cents.
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