The issue of pay packets for billionaire families who control or influence ASX-listed companies got a whole lot more complicated last week when James Packer surrendered the moral high ground of volunteerism and reportedly joined the overpaid brigade.
I must have cited the excellent Packer family practice of not drawing a salary from PBL or Crown Resorts on more than a dozen occasions at AGMs over the years.
Indeed, AFR journalist Jill Margo’s recently released updated biography on Westfield founder and billionaire Frank Lowy includes the following interesting passage:
It seemed 2010 would be a celebratory year. It was the year Westfield turned fifty and Frank turned eighty. It was also the year the BRW Rich List, for the first time, declared Frank the wealthiest man in the country. Worth $5.04 billion, he sat atop one of the world’s largest listed retail property groups. At the 2010 AGM he stood for re-election to the board for another three years and such was his confidence that from the podium, rather than engaging with the usual battle with shareholder activists, he enjoyed himself.
When the meeting was open to questions, first to his feet was journalist and self-described shareholder activist Stephen Mayne, who congratulated Lowy on reaching the top of the Rich List and cheekily asked what took him so long. Mayne then noted that Frank, Peter and Steven Lowy took home a combined annual pay packet of $31 million, of which $15 million went to Frank. He calculated this was $40,000 a day and suggested it might be time for Frank to follow the lead of the Packers and begin working for nothing, or at least for much less.
Frank reminded Mayne that he made this same observation year in and year out. Why, he asked, should anyone lump the three Lowys together? They didn’t live together. On his own salary he was clear. “I don’t work for nothing. I know I can afford it, but I believe I’m entitled to get paid. And just on the sideline, I don’t keep that money that I get paid from the company. I give it away, and a lot more, to deserving causes. I don’t believe that the Westfield shareholder is a deserving cause.”
Then having seemingly enjoyed the encounter he thanked Mayne and said he hoped to see him the following year. “You keep me on my toes!” he said.
Measured in today’s dollars, the Lowys and the Murdochs have together helped themselves to more than $1 billion in pre-tax salary and bonuses from public companies over the past 30 years.
James Packer and his late father, Kerry, set themselves apart from this astonishing exhibition of greed by refusing to draw any salary at all.
However, this all ended on Thursday when Crown Resorts released this statement advising that Robert Rankin was replacing James as executive chairman and Packer would become a humble executive director “on terms which are currently being discussed with the board”.
The AFR’s Chanticleer columnist Tony Boyd declared in his Saturday column that Packer had “signalled his intention to take a $10 million pay packet as an executive director”.
This has not been publicly confirmed anywhere and any such move would immediately lead to Crown’s remuneration report being voted down by the independent shareholders, just like what happened at the 2011 AGM.
Unlike all other billionaire families running ASX-listed companies, James Packer is unique because he’s got majority control and doesn’t seemingly share power with any parents, siblings, wives or adult children. He can literally do what he likes.
He’s also the first billionaire Rich Lister to take on a highly paid executive director role so far down the nominal pecking order, which, after Friday’s reshuffle, is as follows at Crown Resorts:
- Robert Rankin: executive chairman
- John Alexander: executive deputy chairman
- Rowen Craigie: chief executive officer
- James Packer: executive director
The independent directors on the remuneration committee, who will negotiate the fine detail of James Packer’s first executive contract, are former Qantas CEO Geoff Dixon (chair), plus ad man Harold Mitchell and John Horvath.
It certainly won’t be a flat $10 million, but with short-term bonuses, you would think something in the order of $2 million to $3 million would be appropriate in 2015-16, rising to potentially double this figure if long-term incentive targets are hit over the coming three to four years.
Presumably all will be revealed in the annual report and notice of meeting, which is scheduled for release sometime in September ahead of an October 21 AGM in Melbourne.
Crown’s full-year results presentation painted a positive picture of the way ahead, although it was far less bullish on the proposal to build a giant new hotel tower, which would dominate Melbourne’s Southbank.
This image from the February 2015 interim results showing an enormous 350 metre-plus tower dominating the existing Crown Towers and neighbouring buildings was nowhere to be seen in last Thursday’s slide pack, suggesting Packer is not having much lobbying success with new Victorian Premier Daniel Andrews or Planning Minister Dick Wynne.
There’s also the minor issue of Tony Abbott’s recently introduced red tape over flight paths, which restricts Melbourne developers from building above 230 metres because of air-safety requirements.
If Packer can get a permit to build the tallest building in the southern hemisphere in Melbourne, he’ll deserve a seven-figure bonus from his shareholders.
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