Cannon-Brookes,the co-founder of tech company Atlassian who earlier this year became AGL’s largest shareholder with an 11.3 per cent stake,described the board’s argument that supporting all of his nominees threatened to compromise its independence as “bullshit”.
Mike Cannon-Brookes’ investment company,Grok Ventures,succeeded in blocking power giant AGL’s proposed break-up.Wolter Peeters
“I don’t know if they are scared,all I know is their argument is bullshit,” Cannon-Brookes said in an interview with this masthead. “They meet every single legal definition of being independent ... there is no connection,no contract,no legal agreement with any of them. Some of them I haven’t even spoken to.”
AGL has 4.5 million retail customers and owns a fleet of power plants accounting for 8 per cent of Australia’s total carbon emissions,making it the nation’s heaviest emitter.
Cannon-Brookes,together with Canadian investment giant Brookfield,attempted to acquire the company for $8 billion earlier this year. When that deal fell apart,he ran a successful shareholder campaign to prevent the company’s planned demerger and has pressured the company to fast-track the closure of its coal-fired power stations.
The billionaire’s private vehicle Grok Ventures has put forward four director nominees for the AGL board ahead of its annual meeting on November 15:former Energy Security board chair Kerry Schott,Swinburne University chancellor John Pollaers,CSR director Christine Holman and former Tesla Energy director Mark Twidell.
However,the board has told investorscandidacy,sparking a new stoush with Cannon-Brookes ahead of the meeting.
AGL chairman Patricia McKenzie this week said the board did not believe the other candidates would provide the “additional experience and skills necessary to ensure the successful implementation of the board’s strategy”.
McKenzie has also described the coming shareholder vote as an opportunity to ensure the board remained independent and represented the interests all investors. The board needed to represent “100 per cent of the shareholders”,she said,“and 88 per cent of those are not Grok”.
Cannon-Brookes said AGL’s decision to support just one of Grok’s candidates “makes no sense”.
“If you say these aren’t independent candidates,you can’t support one of them,” he said.
Cannon-Brookes’ insistence of Grok’s nominees’ independence has been supported by CGI Glass Lewis,a major proxy adviser that guides institutional shareholders on how to vote on board appointments,pay and other corporate matters.
The firm noted that AGL’s board had raised concerns that Grok was “asking for too much representation”. But it told shareholders that Grok’s nominees were “entirely independent ... other than having been forwarded by the investor following what appears to have been a systematic,well-vetted and thoughtful process to identify high-quality director candidates”.
“We firmly believe any Grok nominee who is elected to the board will,at the very least,bring independent thought and perspective into the boardroom,which ... may be directionally aligned with one another or even some of Grok’s views,but only as a result of intellectually honest deliberations with their fellow board members or the board reaching an overall consensus,” it said.
to back the candidacies of Twidell,Schott and Holman,but has not recommended voting in favour of Pollaers,a former executive at Pacific Brands and Foster’s.
In the interview on Tuesday,Cannon-Brookes said Grok would cast its votes against AGL’s climate transition plan,while CGI Glass Lewis has recommended that investors support it.
Despite AGL earlier this year of its last-remaining coal-fired power station,Loy Yang A in Victoria’s Latrobe Valley,by up to 10 years to 2035,Cannon-Brookes said that timeline was aligned with a target of global temperatures rising by 1.8 degrees above pre-industrial levels rather than the more ambitious 1.5-degree target of the Paris climate agreement.
“It’s great that it’s more ambitious than what they had before ...[but] I don’t think it’s ambitious enough or really goes far enough,” he said.
Cannon-Brookes,who said he had spent $600 million amassing his stake in AGL,reiterated his view that AGL’s board urgently needed renewal and more relevant skills to harness the enormous “behind the meter opportunities” as households switch to 100 per cent electricity in coming years.
After scuttling AGL’s planned demerger,which Grok argued would have left two smaller entities less-able to invest in renewables to replace coal-fired power stations,he said he believed the “job is half-done”.
“Now,as a shareholder,I want to build a great growth company that goes and attacks this decarbonisation opportunity and really profits from it,” he said. “It has a huge potential to do so,given the assets it has,and we need great talent to go do that.”
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