Xero, Airtree's forgettable week
Local tech companies are providing Rampart with plenty of rich material.
On Saturday afternoon, I made a pilgrimage all-too-familiar to Rampart’s Sydney subscribers: the picturesque drive south to IKEA at Tempe, on the fence line of Sydney International Airport. While my family was captivated by IKEA’s stirring selection of kids’ tents, I was soaking up the Princes Highway fumes and the deafening plane noise and marvelling that WiseTech founder Richard White made $9 billion so he could still live here with his mother.
White aside, the local tech industry gave us plenty of rich material last week. Xero’s board of directors has for some months been grappling with investor backlash over the upwardly revised remuneration package being negotiated with its American CEO Sukhinder Singh Cassidy, as covered by Ivor Ries last month. Chairman David Thodey is widely held in the market as an honest broker. It was therefore surprising when Xero released the terms of Singh Cassidy’s new package last Monday (August 24), just three days ahead of its annual general meeting.[[Xero operates on a March 31 year-end calendar.]]
Ivor Ries
What this meant is that Xero waited to make this disclosure until after institutional investors had already cast their AGM votes the previous week. It depends on the custodian, but the cut-off for voting is usually five to six calendar days out, which makes the timing of Xero’s announcement incredibly cynical.[[Institutions can change their votes after the cut-off but it’s a real hassle.]]
So Xero copped a 71 per cent vote against the remuneration report when shareholders didn’t yet know the details of Sukhinder’s sweetheart deal. If Xero had been fair dinkum and given the register full visibility ahead of the AGM, it’s a fair bet it would’ve broken National Australia Bank’s all-time rem strike record of 88 per cent in 2018. As it is, there are not many companies that get a 70 per cent vote against the remuneration report and have the same CEO 12 let alone 18 months later.
