Friday , October 30 2020
Breaking News
Home / Business / Myer vows to shrink its board and cut fees after investor pressure

Myer vows to shrink its board and cut fees after investor pressure

The moves come after pressure from Myer’s second-largest shareholder Geoff Wilson, chairman of Wilson Asset Management, who sent a letter to Mr Hounsell on Tuesday requesting changes at the board level.

Loading

In a response to Mr Wilson’s letter, Mr Hounsell said the company had been considering the size of its board for “some time” and that Myer was “extremely mindful” of reducing the board’s size and fees to reflect the size of the business.

“Today’s announcement of a smaller board reflects the size of the business, our ongoing focus on costs and the current operating environment,” Mr Hounsell said.

The chairman also responded to a number of other queries raised by Mr Wilson in his missive on Tuesday, including Myer’s relationships with suppliers.

Retail billionaire Solomon Lew, who’s Myer’s largest shareholder and a fierce opponent of its management, alleged in a letter earlier this month that suppliers were “hesitant to do business” with the company, a claim Mr Wilson asked the board to explain.

Mr Hounsell said the company would not comment specifically on its relationship with suppliers, but said the business had retained the support of its merchandise supplier base and had continued to pay suppliers in line with their existing contract terms or better.

Myer has moved quickly to appease fund manager Geoff Wilson, who called on the retailer to shrink its board and reduce directors fees.

Myer has moved quickly to appease fund manager Geoff Wilson, who called on the retailer to shrink its board and reduce directors fees.Credit:James Alcock

However, the chairman noted the retailer had been frequently adjusting its product range during COVID-19, changes which may have resulted in suppliers being cut.

No key suppliers had been lost due to an inability to receive trade credit insurance, Mr Hounsell said.

The chairman promised shareholders Myer would return to paying dividends and distributing its stash of franking credits “when it is prudent to do so”.

“Finally, Myer takes this opportunity to thank Wilson Asset Management for its ongoing support of the company during what is, and we agree with the comment in your letter; ‘a difficult and uncertain time’,” Mr Hounsell said.

Tensions between Myer’s management and its largest shareholders have been building in recent weeks following the company’s $172 million loss reported in early September.

Most Viewed in Business

Loading

About admin

Check Also

Sigma Healthcare manager charged with insider trading

Sigma has since entered a different supply agreement for “fast-moving consumer goods” with Chemist Warehouse, …