The chairman of Fairfax, Ron Walker, has responded to staff concerns
about the $4.5 million payout to outgoing CEO Fred Hilmer in this memo
to staff:

Thank you for your note and your words of congratulations on my appointment as Chairman.

As
you know, the company has made a number of decisions in recent years
that confirm our long-term commitment to Melbourne and our confidence
in the future of The Age – most notably the construction of the
Tullamarine plant and the appointment of experienced newspapermen like
Don Churchill and Andrew Jaspan. I believe the paper’s best days are
ahead of it and I know how committed the staff members in Melbourne are
to the success of The Age. I am delighted to be chairing the board and to help the management team in being a champion for The Age in Melbourne.

I am aware that there has been tight cost management at The Age
in recent years and across all our mastheads. Everyone in the company
has needed to work hard to keep the profitability of our papers growing
at a time of intensifying competition. As you would be aware, much of
the strength in Fairfax’s recent profit performance has come from New
Zealand and regional and community newspapers.

In all parts of
the business, we will need to maintain a strong cost focus whilst
looking for improved circulation performance, new revenue opportunities
and opportunities for further business development or acquisitions. By
posting consistent and impressive financial results, the staff at
Fairfax best equip the company to control its own destiny – which is
something we all want.

I have noted the comments of the House
Committee concerning the retirement allowance to be paid to our
departing CEO, Fred Hilmer. On the specific issue of executive
remuneration, I can assure you that the Board takes its
responsibilities to its shareholders very seriously. A committee of the
board reviews remuneration, receives external and independent advice,
and makes proper disclosures through the annual report.

We are
accountable to shareholders for this decision and we have made
decisions concerning the remuneration of our current and next CEO with
regard to what we believe to be in the best interest of the business.
As I indicated last week, Fred’s tenure as CEO has resulted in Fairfax
being a far stronger, healthier and more dynamic company – well
positioned for further growth. Our staff are our greatest asset, and I
will continue to support them in the years ahead.

If you have
further issues on the strategic direction of the company, can I suggest
you raise them in your discussions with Don Churchill and Andrew Jaspan.

Yours sincerely
Ronald Walker