James Packer Vote Saves Directors’ Skins at Crown Resorts AGM, Executive Pay Voted Down
Australian billionaire James Packer used his ownership clout to save three Crown Resorts directors up for reelection at the company’s annual general meeting Thursday.
The fate of the three directors hung in the balance after an
influential organization that advises Australia’s biggest pension funds called
for shareholders to send the message to the Crown board that poor governance
would not be tolerated.
The company is currently the subject of a public inquiry
into allegations of anti-money laundering failures and involvement with junket
operators with links to organized crime.
Shareholder Revolt
Minor shareholders heeded the call and largely voted to boot
out the directors, prompting Packer, who owns around 36 percent of the company,
to come to the rescue. Nevertheless, one board member, John Horvath, promptly
resigned, acknowledging he had been spared only by Packer’s vote.
Horvath received a vote of 58.4 percent. That’s more than
the 50 percent needed to stay, but without Packer it represents the approval of
just 22 percent of shareholders.
The other two, Jane Halton and Guy Jalland, have vowed to
remain. Jalland is a Packer appointee and the boss of the billionaire’s private
investment firm, Consolidated Press Holdings. He’s digging in his heels despite
41 percent of shareholders wanting him out.
Bye-Bye Bonuses
But shareholders also made their dissatisfaction heard by
voting down a resolution to adopt the remuneration report. Under Australian
corporate rules, if shareholders reject a remuneration report for two years in
a row, they can then call for a resolution to remove the whole board.
Crown chair Helen Coonan on Tuesday admitted while giving
testimony to the public inquiry that the company had facilitated money laundering
but had done so through “ineptitude” rather than any criminal intent. On
Thursday, she apologized unreservedly to shareholders for the board’s failures.
In all of its history, Crown has never faced adversity like
we are now – but I’d like to reassure all our investors, stakeholders and staff
that the board is determined and willing to learn from the past,” Coonan told
the AGM.
“The board accepts that there needs to be an injection of
new perspectives and expertise on our board. These changes need to be
undertaken in a considered and thoughtful manner to ensure an orderly
transition,” she added.
Packer Could Divest
The inquiry will ultimately determine whether Crown should
retain its gambling license in New South Wales. The company hopes to open a $2
billion casino in state capital Sydney at the end of the year.
Testifying before the inquiry, Packer acknowledged that he
may have to sell some or all of his equity in the business for the company to
keep its license.
At the AGM, Coonan refused to answer questions about what
Crown would do if it were to lose its Sydney license.
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