Samuel Terry loses bid to remove Karoon director at firey AGM
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The news: Samuel Terry Asset Management (STAM) has lost its fight to remove Peter Turnbull from Karoon Energy's board after all resolutions at the company's annual general meeting were approved.
The numbers: Last week, STAM, which holds a 5.02% stake in Karoon, said it had formed an association with Sandon Capital, which owns a 0.42% shareholding, ahead of today's AGM, with the intention of voting against five of the meeting's nine tabled resolutions.
Karoon shares lowered 1.6% to $1.8 by 12:30pm AEST. They are down nearly 12% compared to 12 months ago.
The context: The fund managers' public criticism of Karoon last week included urging shareholders to deny performance incentives to CEO Julian Fowles and reject raising board directors' fees.
About 28% of shareholders voted against the re-election of long-term director Turnbull and about 21% of shareholders voted against Fowles' performance incentives.
However, more than 25% of shareholders voted against the adoption of the remuneration report which constituted as a first strike for the board.
What they said: After a representative from the Australian Shareholders' Association queried Karoon's chair Peter Botten on why so many shareholders voted against Turnbull's re-election, Botten deflected the question. He said he would love to look into shareholders' minds as to why but noted the drop in the company's share price since Turnbull joined the board in 2014.
Sandon founder and managing director Gabriel Radzyminski then questioned why Botten did not mention their campaign in explaining the outcome.
"There was actually a pretty simple, straightforward answer as to why there was that vote. A couple of shareholders, ourselves and Samuel Terry, actively campaigned against Mr Turnbull's re-election. So that's where it comes from," Radzyminski said.
Botten responded: "I was asked what the rationale was. I could quite easily have said yes, there are 20% of people voting against, but their rationale is not necessarily particularly clear".
Radzyminski said: "We wrote to you on the first of May, giving pretty detailed reasons as to our voting on each resolution, including Mr Turnbull. So it wasn't a petulant fit of anger. We actually gave you the reasons".
The source: Karoon Energy AGM
