Rogue’s Gallery

As the corporate Annual General Meeting season descends on us, the captains of industry are holding out there hats and crying poor.

Crikey Notices

Corporate watchdog website Crikey! this week released the following list of up-coming company resolutions where shareholders will be asked to approve pay hikes for directors.

* 200% - Clough - "That the maximum aggregate amount of fees that may be paid per annum to Non-Executive Directors of the Company be increased by $400,000 from $200,000 to $600,000."

* 86% - Croesus Mining - "That the pool of fees payable to Directors be increased from $161,000 to $300,000." Strangely, Croesus' 2002 annual report reveals that they are paying their 3 NEDs $173,500 in directors' fees, plus another $15,615 in superannuation and $28,400 in "other benefits" - total NED remuneration of $217,515. This contradicts the explanatory notes in the Notice of AGM, which states that current directors' fees are $70,000 for the chairman and $38,000 for the NEDs. Admittedly, Croesus' revenue almost quadrupled during the year following its merger with Central Norseman Gold. But does this translate to an almost doubling of directors' workload to justify the pay increase being sought?

* 60% - Skilled Engineering - "That the maximum aggregate amount of fees payable to Directors, for their ordinary services as Directors, be increased by $150,000 to $400,000 per year."

* 60% - Newcrest Mining - 'That the aggregate sum per annum available for payment to the non-executive Directors of the Company in accordance with Rule 58 of the Company's Constitution as remuneration for their services to be increased by $300,000 from $500,000 up to a maximum sum of $800,000 per annum.'

* 50% - Abigroup - To consider and if thought fit, to resolve that pursuant to Article 19.1 (a) of the Company's Articles of Association, the maximum aggregate annual remuneration which may be paid to the Company's Non-Executive Directors be increased from $300,000 to $450,000.

* 50% - Coates Hire - "That the maximum aggregate amount of directors' fees payable to Directors by the Company be increased by $100,000, from the current maximum of $200,000 to $300,000, including for the purpose of ASX Listing Rule 10.17."

* 50% - Infomedia - "That Rule 7.3(b) of the Constitution of the Company be modified effective immediately upon the passing of this resolution by deleting the symbol and numerals "$300,000" (three hundred thousand dollars) and replacing them with the symbol and numerals "$450,000" (four hundred and fifty thousand dollars)."

* 50% - Hill's Motorway - To consider and if thought fit, to resolve that pursuant to Article 12.15 of the Company's Articles of Association, the maximum aggregate annual remuneration which may be paid to the Company's Non-Executive Directors be increased from $400,000 to $600,000.

* 50% - Wattyl - "That in accordance with Listing Rule 10.17 of the Australian Stock Exchange Limited and rule 41 of the Company's Constitution the aggregate maximum amount of remuneration of the non-executive Directors be increased by $200,000 per annum to $600,000 per annum."

* 43% - Collection House Limited - Non-executive directors' remuneration - To increase the maximum aggregate remuneration for Non-Executive Directors from $350,000 to $500,000.

* 40% - Centro - "Given Centro's continuing growth, the capacity for additional directors to join the board, especially for succession planning, is important. The aggregate remuneration limit for non-executive Directors has not changed for three years. While there is no immediate requirement to utilise any increased amount, an increase is proposed from $500,000 to $700,000..."

* 39% - Computershare - "That the maximum aggregate annual remuneration of non-executive Directors be increased by $140,000 to $500,000."

* 36% - QANTAS - "That the maximum aggregate amount payable to Non-Executive Directors by way of Directors' Fees be increased from $1,100,000 to $1,500,000 per annum."

(Source: Crikey!)

Website Reveals Broken Companies

Another website aiming at keeping bosses honest is the new Insolvency notice site - http://www.insolvencynotices.com.au. Every day an average of 40 Australian companies are declared insolvent - more than 19,000 since the year began - but many of the creditor companies directly affected have been left in the dark.

Insolvency costs the Australian economy $5 billion to $10 billion a year - about 1 to 2 per cent of gross domestic product and if creditors don't act quickly and effectively the personal and economic costs can be significant. The site is an attempt to bridge that gap, collating all administrations reported to the Australian Securities and Investments Commission every day, added in statutory notices placed in newspapers. The database will be updated three times a day and can be searched at no charge. (Source: SMH)

HIH's Chiefs Want More

Back to the Royal Commission into greed, five former HIH executives - including chief executive Ray Williams and deputy George Sturesteps - have challenged the carve-up of a $10 million surplus in the failed insurer's superannuation fund in a move that will delay and erode the entitlements of up to 1000 former employees. The executives have accused the fund trustee of "unjust, inequitable and discriminatory" conduct in calculating their payouts from the fund. But the staff-appointed fund trustee, former HIH investment manager Michael Rook, said he was "bitterly disappointed" with the challenge, saying the action will add to the cost of the court proceedings (scheduled on December 19 in the NSW Supreme Court) to wind up the fund, and delay payouts for other members until next March. "What they (the executives) are saying is they want more from the fund and, as a consequence, everyone else will get less," Rook says. (Source: The Australian)

Suncorp Regrets Options Fiasco

Suncorp-Metway has admitted it should have disclosed an options deal last year with departed chief executive Steve Jones that netted him around $16 million and helped him walk away from the company with close to $30 million. Jones had transferred the two million options late last year to a broker who immediately exercised them and sold them on-market. Chairman John Lamble, who will retire next March, told the company's annual meeting that while Suncorp did not breach ASX rules, it should have been disclosed. Lamble and the board also came under criticism for the massive sum that Jones took away from Suncorp on his unexpected resignation last month, but shed no new light on the reasons behind the exit. (Source: SMH)

Bali Attack Forces CCA Downgrade

Analysts have downgraded Coca-Cola Amatil, citing concerns about its exposure to Indonesia, even after the beverage bottler said it would not be materially affected by the Bali bomb attack. The company's shares fell nine cents to $5.25, bringing the stock's total loss to 28 cents since the attack. Several other companies with exposure to Indonesia, including Qantas and contractors Leighton Holdings and Clough, were little changed or stronger yesterday as analysts focused on other aspects of those businesses. Coca-Cola Amatil said it had taken immediate steps to protect its assets and its 8500 employees in Indonesia, and had made an initial assessment of the business impact of the attack. (Source: The Age)

Bank Complaints On the Rise

Complaints against the nation's banks jumped 12.5 per cent in 2001/02, according to the Australian Banking Industry Ombudsman. It received 7,992 cases during the year with 88 per cent dealt with by the bank after being approached by the ombudsman. Nearly 65,000 calls were made to the ABIO during the year, according to its annual report. But Australian Bankers' Association chief executive David Bell attributed the rise in complaints to a growing banking market and increased awareness of the ABIO's existence. The demise of Ansett and junior phone company One.Tel had also spurred an influx of queries from banking customers as they rushed to gain credit card refunds for defunct airline tickets and end direct debits for their phone bills. (Source: Nine MSN)

Footscray Company Falls Victim to Enron

The collapse of United States energy trader Enron, which brought down one of the world's largest accounting groups and stripped billions of dollars from US pension funds, has claimed its first local victim. Footscray-based National Forge, which makes car parts and titanium products such as golf club heads, asked to be put into receivership after a US customer cancelled 85 per cent of its orders for this financial year. The customer, GE Power Systems Aerofoils, has slashed its 2002-03 orders for titanium turbine blades by $6.7 million, with $5.91 million of the cuts falling in the June half of the year. The $6.7 million reduction in order value for the year represents more than 12 per cent of National Forge's 2001-02 revenue of $52.5 million. (Source: The Age)

Crosshairs Trained on Billionaire

A creditors' group has asked Global Crossing chairman Gary Winnick to resign from the telecommunications company he founded and says it may try to tap the billionaire's personal fortune to recoup corporate funds. The request, made by a US Bankruptcy Court committee of unsecured creditors, represents the first outward sign of a split between Winnick and Global Crossing, which filed for bankruptcy protection in January after incurring billions of dollars of debt while building a worldwide fibre-optic network. If the creditors have their way, and experts say that is likely, Mr Winnick will have no say in Global Crossing's operations. Winnick has been under scrutiny because he sold nearly $US124 million worth of stock in May 2001, shortly before the company announced that lagging sales would hurt its financial results. (Source: The Age)

ImClone CEO Pleads Guilty to Fraud

The former CEO and founder of ImClone, a company that claims to have a cure for certain types of cancer, has pleaded guilty to six charges of fraud, perjury, conspiracy and securities fraud, and obstruction of justice. Sam Waksal, who founded ImClone in 1994 as a vehicle for the experimental cancer drug Erbitux, told a Manhattan court yesterday that he had "made mistakes" when he dealt in ImClone shares. He tried to sell millions of dollars worth of ImClone stock just days before the US Food and Drug Administration rejected the firm's application to use Erbitux on cancer patients. The FDA said ImClone's application was too flawed to consider, and its clinical trials on patients were unscientific. Before this information was known, ImClone shares soared from US70c to $US75. Waksal, who had helped inflate the price by talking up the drug, made $US54 million from stock and options during his time at the company. (Source: SMH)