Shareholders in retailer, Harvey Norman have delivered a first strike against the company’s board during a tense annual general meeting at which chair Gerry Harvey claimed critics of the retailer “totally friggen mad”.
The homeware retailer’s remuneration report was rejected by 50.63% of shareholders, double the 25% required for a first strike, meaning a repeat next year would trigger an automatic spill of a board that has remained unchanged since 2007.
The company had narrowly avoided a first strike at its 2016-17 AGM a year ago when just under 25% of votes were cast against the remuneration report. Yesterday’s doubling means that most of the company’s non-insider shareholders voted against the motion at the AGM.
Australian Shareholders’ Association representatives at Tuesday’s meeting in Sydney were lambasted as “agitators” by Mr. Harvey after the group had said it would vote against the report.
“There are people sitting in this room who think we are crooks; we are not crooks and we’re very upset that you think we are,” Mr. Harvey said.
“There are critics among you who are mad – totally friggen mad,” media reports quoted Harvey as telling the meeting.
Mr. Harvey said the “agitators” ignored the fact Harvey Norman was 55% owned by the Harvey family and other company insiders.
He said most independent directors “don’t know what’s going on in the company at all”, as illustrated by the banking royal commission, and that he would try to convince investors that an insider-heavy board was the best model for a public company. “You’ll have a much better company in every case that I can think of,” he told the meeting.
However, with the now live issue threat of a second strike at next year’s AGM, Mr. Harvey said he would consider suggestions about how to change the make-up of the board.
“If it makes sense, of course, I’ll look at it, but if it doesn’t make sense I’ll say ‘piss off, see you later’,” he said.
The company told the ASX before the meeting that sales at its Australian franchisee-operated stores were down 1.3% on a topline basis and 0.2% on a same-store comparison so far this financial year.
Comparable sales from Harvey Norman’s wholly or majority-owned stores – which includes those in New Zealand, Slovenia, Croatia, Ireland, Northern Ireland, Singapore, and Malaysia – were up 3.0% and topline sales were up 2.5 at $A2.88 billion.
“Sales made by franchisees in Australia are not made by Harvey Norman Holdings Limited or controlled entities,” the company said.
Harvey Norman shares ignored the noise and were up 3% to $3.10 yesterday, They dipped briefly to $3 on Monday. In March Mr. Harvey told CNBC when the shares went below $4 ”that was simply mad” and that for them to be under $4 was “crazy.”
