Fairfax chairman Ron Walker is under mounting pressure to resign immediately, after company patriarch John B Fairfax said he would vote against Mr Walker’s re-election at the firm’s annual general meeting in November.
In a tersely-worded press release, Marinya Media, the private company controlled by Mr Fairfax, and the company’s biggest individual shareholder with a 9.7% stake, said it could “see no clear case to support the continuance of Mr Walker’s directorship or Chairmanship for another year”.
“Mr Walker is well aware of significant shareholder dissatisfaction with his tenure as Chairman. Marinya, for one, cannot see how Mr Walker’s stated intention to delay his retirement assists the company or its shareholders.”
In newspaper reports this morning, Mr Walker said he intended to re-nominate as Chairman at the AGM on November 10, before leaving next August after the company announced its annual profit results. Marinya is believed to be livid that Mr Walker went public with his future intentions.
“[Mr Walker’s plan] unnecessarily defers the commencement of the much needed process of board and leadership renewal and we consider it inappropriate that a departing chairman would be influential in the choice of new directors,” Mr Fairfax and eldest son Nicholas Fairfax said in the strongly-worded riposte.
“Renewal must start today.”
Close followers of the company have told Crikey this afternoon that Mr Walker’s current position is now untenable and urged him to depart immediately. Institutional investors are believed to be backing the move to neck Mr Walker now.
If Mr Walker lasts until November, it is believed Marinya will be able to secure the support of the majority of the Fairfax board to oust him from his position.
In a damning assessment of Mr Walker’s four year reign, Marinya said the Fairfax board “needs new leadership to ensure it is unified, functions effectively and provides sounds strategic direction.”
“During Mr Walker’s chairmanship, an unacceptable degree of risk was introduced into the company’s capital structure through a series of debt-funded acquisitions, whilst the cyclical nature of the company’s earnings resulted in Fairfax Media’s financial and share price performance deteriorating dramatically.”
Since Mr Walker became Chairman in August 2005, the company’s share price has tumbled 60%, from $4.34 to $1.75. Fairfax shares rose 4.2% this morning after the report flagging Mr Walker’s delayed departure was published. They closed up 3% at $1.725.
Last financial year, Fairfax’s net profit fell 38.7% to $242.4 million as advertising revenue plummeted.
Mr Walker earlier told the Australian Financial Review that he had “discussed with the board my intention to retire as chairman in the second half of 2010, after we have completed the board renewal program, settled the new chairman’s role and released our 2009-10 profit results.”
“The past five years of rebuilding Fairfax into one of the world’s most diversified media companies has been an enormous challenge and an exciting time for us.”
It is understood that some investors are now gunning for John B Fairfax to assume the chairmanship. Under another scenario, newly-appointed deputy chairman Roger Corbett could succeed Mr Walker in November.
However, Marinya’s preemptive strike could clear the way for Mr Corbett or Mr Fairfax to ascend to company’s most senior board role immediately.
Ron needs to go. He has completely rooted the SMH, turned it into a purveyor of the lowest common denominator rubbish and destroyed any pretensions it had to quality journalism. Having said that, he has just followed the market in replacing journalism with opinion because, well, talk is cheap. Heaven forbid getting reporters out of the office and actually following up stories rather than just cutting and pasting stuff straight off the Internet, then adding their own political bias. Feed the people crap cause, really, the public are not half as smart as the cool and groovy guy and gals working at Fairfax, News Ltd etc. Here’s hoping that maybe a media outlet will stand up and make a commitment to quality journalism and pursuing issues in the public interest, but I’m probably just pissing in the wind again…