The recent 30% slump in its share price has seen BHP-Billiton, the world’s biggest mining company, slip out of the global top 10 for market capitalisation.
After reaching third place behind Exxon-Mobil and Apple earlier this year and getting within $US50 billion of top billing, the Big Australian’s market capitalisation has slipped to $US184 billion, which is less than half of Exxon-Mobil’s $US375 billion.
But that doesn’t mean the BHP-Billiton AGM still isn’t the biggest event during the AGM season.
About 750 shareholders gathered in Melbourne yesterday and we can thank Peter Costello for that as it was he who legislated, against the advice of Treasury, to keep BHP in Australia, as he explained in a Fairfax column two years ago.
For quality of debate, BHP and Telstra traditionally serve up the lengthiest and craziest fare.
Yesterday was no different at BHP-Billiton, which for almost three hours was dominated by Green, indigenous, union and anti-uranium debate.
Sure, developing the world’s biggest uranium deposit at Olympic Dam is an important issue but that doesn’t mean dozens of people should harangue the board for more than two hours, including one indigenous woman who swore at the board like an absolutely trooper in a performance such as I’ve never seen in 400 AGMs.
Chairman Jac Nasser just let her go. Even worse, when some white racist got up and declared “we won the war” against indigenous Australians, rather than aggressively slapping him down Nasser declared that BHP welcomes all views.
Nasser appeared quite willing to engage on a range of issues but he didn’t bite when it came to his own role as one of the independent directors of BSkyB who is endorsing the re-election of James Murdoch as chairman at the AGM in London on November 29.
Rather than accepting the reality of James Murdoch suffering the biggest protest vote of all the directors at the News Corp AGM, the Murdochs have successfully lobbied the BSkyB independent directors to support James Murdoch’s re-election.
A repeat of the News Corp AGM now seems likely with a majority of independent BSkyB shareholders voting to remove James Murdoch as a director, with only News Corp’s controlling 39% stake in Sky saving the day.
But what credibility does this News Corp vote have when almost 70% of its independent News Corp shareholders voted to remove James Murdoch from its board just four weeks ago? There is no mandate.
Given that the Murdoch family only own about 5% of BSkyB, this situation just highlights the undemocratic nature of News Corp’s dual class voting system where almost 70% of the shares on issue don’t get to vote.
Presented with all this information at yesterday’s BHP-Billiton AGM, Nasser simply refused to engage. Silent, stum, unresponsive.
It was as if someone’s CV as a director is not relevant when they seek re-election? Why should Australia’s biggest company be chaired by someone who seemingly goes weak at the knees when it comes to protecting minority shareholders and taking on the world’s most powerful family?
The other governance issue at BHP’s AGM related to David Crawford, the 17-year veteran who the Australian Shareholders’ Association ended up opposing and voting almost $500 million worth of undirected proxies against. As the results show, this made him the least popular director, but he was still re-elected with 98.9% in favour. We’ve clearly got a long way to go to get a culture of director accountability in Australia.
When presented with the arguments against Crawford, as were outlined in this recent Crikey story, Nasser simply declared he was a “fantastic” director.
Not so fantastic was the $5 billion that Foster’s lost in the wine business. Crawford has been chairman since 2005 and also sanctioned some outrageous executive payouts as part of the $12 billion Foster’s takeover, which saw protest votes of more than 40% at last month’s AGM.
Not so fantastic was the $3 billion lost by ABC Learning shareholders and lenders. As chairman of Lend Lease, Crawford can’t see the problem with continuing to support the re-election of former ABC Learning chairman and long-standing audit committee chair David Ryan.
While the two strikes rule has seen more attention than ever on executive pay voting this season, the unions have also been playing a bigger role.
Cleaners, many of whom are refugees, had quite an impact at this year’s Westfield AGM in May and they will return to the fray at the AGM of Spotless, Westfield’s biggest contract cleaner, from 2.30pm at the MCG this afternoon.
The unions were also out in force at BHP-Billiton’s AGM yesterday, specifically related to the failed enterprise negotiations in the Bowen Basin coalfields, although they weren’t nearly as prominent as at the recent Qantas AGM where industrial issues were just as dominant as uranium issues yesterday.
*Stephen Mayne is a director of the Australian Shareholders’ Association where he is company monitor for News Corp
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