“Our belief is the reduction needs to be permanent. We would also call on the board to reduce the directors’ aggregate fee pool to reflect the current market capitalisation of Myer.”
Myer, which has a market capitalisation of simply $193 million, has seven administrators on its board together with chief govt John King. Non-executive administrators obtained a complete of $791,870 in remuneration for the 2020 monetary 12 months and $1 million within the 12 months prior.
Wilson Asset Management’s directive to the beleaguered Myer board comes amid renewed tensions between Myer and its greatest shareholders. In early September, majority shareholder Solomon Lew slammed the corporate’s administration, calling its $172 million loss for the 12 months “disastrous and shameful”.
At the time, Mr Lew referred to as for the board and Mr King’s resignation however didn’t point out if he would name a unprecedented basic assembly to begin the method. Any transfer to depose the retailer’s management would possible require Mr Wilson’s assist.
Mr Wilson additionally issued Myer with a “please explain” relating to the division retailer’s industrial agreements with its suppliers, referring to Mr Lew’s assertion that each his firm Premier Investment and different suppliers have been presently “hesitant to do business” with the corporate.
“Please clarify whether any suppliers, including those associated with Solomon Lew, have withdrawn from their commercial agreements with Myer,” Mr Wilson stated.
He additionally queried if Myer suppliers may nonetheless receive credit score insurance coverage coverage, referring to The Age and The Sydney Morning Herald’s protection that main insurance coverage suppliers had ceased issuing new cowl for suppliers of Myer and David Jones attributable to insolvency considerations.
The shareholder additionally drew consideration to Myer’s stash of franking credit which might permit the corporate to pay a $118 million fully-franked dividend if it had the required earnings.
“Can the boards confirm that, when prudent, it will distribute those franking credits to their rightful owners, Myer shareholders?” Mr Wilson stated.
Wilson Asset Management has requested Myer to make its response to the letter public. Myer didn’t instantly reply to requests for remark.
At Myer’s full-year outcome, launched earlier this month, the corporate revealed it had plunged to its second-largest loss in historical past after a 12 months battered by the COVID-19 pandemic. The firm is within the midst of a turnaround plan to scale back its retailer house and enhance its on-line gross sales.
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Dominic Powell writes concerning the retail trade for the Sydney Morning Herald and The Age.