Rinker AGM (2005)

Details
Company: Rinker
Type: Annual General Meeting
Date: 18 July 2005
Chairman: John Morschel (independent)
CEO: David Clarke

Pre-AGM
Rinker is the model of a good company. Good results, good corporate governance, good company. There really wasn't a lot for me to critisise the board for, which was a bit disappointing because I haven't been to an AGM for a while and I'm getting a little rusty.

I went through the Annual Report (other than the remuneration report which I found to be too confusing even for me, and I just didn't have the time to go through it with a fine comb) and puts ticks all over it. Perfect attendance record for board and committee meetings - tick. Five out of six directors are independent - tick. The only executive director (CEO) is on no committees - tick. Two directors have a legal background - tick. The directors are not on a lot of other boards - tick.

At the end of all that my only concerns were the finance and material industry experience of the directors, a lack of geographic segmentation in the financial report and a lack of women on the board. To be honest I'm not too concerned about the last one, but I like to ask questions and it's an easy question to ask.

So I got up to to ask questions and gave the board my congratulations for having such a good company and making my job of asking tough questions difficult. I comended Rinker on not making any political donations, pointing out that if shareholder want to support a political party then they will do it themselves rather than having the company do it.

Questions and Voting
Me: A board of directors needs atleast one director with each of legal, accounting/finance and relevant industry experience. I've noticed that the Annual Report mentions that some directors have accounting/finance or relevant building/material industry experience but that's all it says. Could you please expand on the relevant experience of the directors?

John Morschel: (Heavily paraphrased) John Arthur has industry experience, Walter Revell has industry experience, John Ingram has fiancial experience through his work in Lend Lease, etc.

Me: The financial report has operational segmentation but not geographic segmentation. Given that Rinker operates in many different geographical regions, different states in the US and Australia, why doesn't the Annual Report have a breakdown of the financial results by geographic location?

John Morschel: There is no legal requirement for the company to provide a geographic segmentation. If you do want to see the geographic segmentation then you can come and see the CFO here at the end of the meeting.

Me: Will the company rotate the auditor after a certain number of years in order to stop any compromise of, not so much actual independence but apparent independence?

John Morschel: Having been a publically listed company for only the past 2 years, the Rinker board has not been looking at auditor rotation. We do ensure that the relevant partner rotates atleast every five years. But we will look at this issue more closely in the future.

Me: There are 6 men on the board, but you are all men, there are no women. That to me indicates that maybe, maybe you are overlooking someone. At the very least it could make the board prettier, not to say that you are not handsome men, you're all quite striking. But has the board considered any women for it's board?

John Morschel: We do not take gender into account when determining members of the board. If there is a good candidate then we will look to get them on the board, regardless of whether they are amle of female. I would also like to point out that this is a small board and increasing its size by one would be a potential burden.

ASA Rep (I forget his name): Why are executives rewarded with bonuses if the company does not beat the market?

John Morschel: Rinker operates in the US where it is customary to have some bonuses vest when the company beats 25% of other companies, rather than the 50% that is the standard in Australia. As we have to compete with these companies for our executives we need to provide a similar remuneration package. There is a problem here of conflict between Australia and the US, where there are usually no restrictions on vesting of bonuses.

Voting: As per the board recomendations. Nothing controversial, Rinker has done an outstanding job in almost every respect.

Post-AGM
Few people asked questions. Maybe 5 or 6 at most. The ASA Rep asked 2 sets of questions, most of the others just got up to say how they approved of how the company was doing. It's to be expected, when a company does well the shareholders tend to be apathetic. It's only after the poo hits the fan that they are willing to take action. However in the case of Rinker I really do think that it's a case of if it ain't broke don't fix it.

News Corporation EGM (2005)

Details
Company: News Corporation
Type: Extraordinary General Meeting
Date: 1 July 2005
Chairman: Rupert Mudoch (executive)
CEO: Rupert Murdoch

I wasn't able to attend this meeting, mainly because it was held in New York, but I thought I might voice my opinion on it anyway. Rupert Murdoch likes holding his AGMs in places where it is hard for most shareholders to go. Up until last year all of the AGMs were held in Adelaide, not exactly the investor capital of Australia (or second, or third...). The Herald had an article on it here. Interesting to note that only one person got up to ask a question, just one.

Let me say, before I blast Rupert Murdoch, that in my opinion he is the greatest, most successful businessman Australia has ever produced. As far as powerful people go, he's up there at the top, and that's of the world, not just Australia. Sure, world leaders are more powerful, but they are positions, not people. Rupert Murdoch is not limited to 2 4 year terms as head of News Corp, he's been there for decades. He has almost single handedly created one of the largest media groups in the world.

But, like many owner-chairmen-CEOs, he treats the company like its all his. He owns about 30% of the voting stock, but his Newscorp shares are only worth about 10% of the total value of News Corp when you take the non-voting stock into account. So he is able to control the company, despite only owning 10% of its shares. And boy does he control it! These options that he is giving to his executives - and he is giving them to his executive, they are in the money, all they have to do is keep the share price at its current price and BANG, juicy profits.

And being the owner of about half of Australias newspapers and a significant shareholder in Foxtel and Sky News Australia, there is not a whole lot of critisism of him in the media. I read the Australian on the same day as the SMH article, News Corp didn't even get a mention in its business section. Good work Rupert!

But, as long as you're as successful as he is, you can get away with a certain amount while only sustaining mild critisism. And with only one person asking him questions at the AGM, mild critisism is all he will get.