Myer has responded to a letter from veteran fund manager, Geoff Wilson, to shrink its board amid a dip in total sales in FY20.
Myer Non-Executive Directors, Lyndsey Cattermole AM and Julie Ann Morrison, have made the decision to ‘retire’ at Myer’s 2020 Annual General Meeting. The two will not seek re-election at the October 29 meeting and will not be replaced.
Myer has moved quickly to placate its second-largest shareholder, Wilson Asset Management, owned by the veteran fund manager, Geoff Wilson, who called for the retailer to cut its board and director’s fees. Wilson Asset Management currently holds 7.8 percent of Myer.
On September 22nd, Mr Wilson sent a letter to Myer calling the retailer to shrink its board and directors’ fees to reflect its market value. The retailer has experienced a 60 percent fall over the past 12 months, sitting at $193 million.
The letter suggests that the fund manager is growing increasingly worried about the retailer’s performance, as well as its future outlook.
This move shrinks the board from seven to five, which is in line with Mr WIlson’s suggestion.
“We have been considering the size of our Board for some time,” said Garry Hounsell, the Chairman of Myer. “Following the decisions of both Lyndsey and Julie Ann to retire at the upcoming Annual General Meeting, the Board will be reduced to five directors, including the CEO and Managing Director.”
The board now consists of JoAnne Stephenson, Jacquie Naylor, David Whittle and Garry Hounsell. Further to the retirement of the board members, the Chairman and Non-Executive Directors have elected to reduce their annual base fee from $300,000 to $250,000 and $120,000 to $100,000, respectively.
“During the past three years, the Chairman and Non-Executive Director fees have been reduced on several occasions,” Hounsell explained.
“The decision to forego Director fees for a period in April, and to receive reduced fees during May and June were absolutely appropriate and today’s announcement of a smaller Board, reflects the size of the business, our ongoing focus on costs and the current operating environment.”
Myer’s total sales dipped 15.8 percent in FY20, with links to the store closures amid the COVID-19 pandemic and strict restrictions in Victoria.
Premier Investments sent a scathing response to the FY20 results, calling them ‘disastrous and shameful’.
“The numbers are dire – notwithstanding the impact of COVID-19, the business is trading beyond poorly – sales are down, EBITDA is down – on top of massive further write-downs to its brands and leases,” Premier Investment’s statement read.
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