Newcrest directors survive proxy advisers’ threats

Matt Chambers and Barry Fitzgerald | The Australian

NEWCREST Mining board members who proxy advisors recommended voting down appear to have survived the threat today’s annual general meeting.

In the lead-up to the AGM, proxy advisors ISS Advisory and Ownership Matters advised against the reappointment of Rick Lee, Tim Poole and John Spark, members of the company’s audit committee.

But proxy votes revealed at the Melbourne meeting showed votes of between 70 and 77 per cent in favour of returning the three non-executive directors, meaning they will be safe although each suffered a substantial ‘no’ vote – Mr Lee at 29 per cent, Mr Poole at 23 per cent and Mr Spark at 26 per cent.

The company’s remuneration report, which some advisors had also recommended voting against, was also set to sail through with 87 per cent of proxy votes in favour of its approval.

Newcrest’s predominantly-overseas shareholder base had been tipped to largely ignore advice from the proxy advisory groups that they take the company to task.

Incoming chairman Peter Hay received 99 per cent of proxy votes in favour of his appointment. The AGM is the final one for chairman Doug Mercer, who will retire at the end of the year.

This calendar year has been a horror one for the gold miner, in which it posted an annual net loss of $5.8 billion on the back of more than $6 billion in asset writedowns and restructuring costs.

The Australian Securities and Investments Commission is investigating accusations that Newcrest selectively briefed analysts ahead of the writedown announcement.

Newcrest also cut the pay of chief executive Greg Robinson and that of most of the company’s executives. And last month the company announced Mr Mercer’s departure and said Mr Robinson would be replaced by new appointment Sandeep Biswas in the second half of calendar 2014.

Mr Mercer today defended the company’s $10 billion, mainly scrip acquisition of Lihir Gold in 2010, stressing that hardly any cash had changed hands and saying the board would make the same decision again.

The Australian Shareholders Association’s Gavin Morton challenged the view, telling the AGM that the acquisition had been made when gold prices were at about the same level they were now and that the value of Newcrest had declined from about $40bn to $10bn.

In an address to the AGM, Mr Mercer said the group was focused on delivering reliable, low-cost production and was well placed to tackle the complexity of Lihir. He also said the board would position the company to generate returns for shareholders in any reasonable external environment, after choosing not to declare a final dividend in 2012-13.

Restoring the company’s reputation and balance sheet was another focus, he said.
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