Oust directors, slash executive pay
FORMER managing director of The Rock Building Society, Kerry Daly, is leading a push to oust two of the company's long-standing directors and slash executive salaries by 50%.
Mr Daly, who left The Rock in 2000 after eight years in the role, is now a non-executive director of Queensland Trustees and Investment which has a 3.3% stake in The Rock.
The firm proposes to appoint Mr Daly and it's own managing director, Michael Hackett to the board of The Rock in place of chairman John Maxwell, who has served on the board for 34 years, and Bradford Beasley, a director of 10 years, whose law firm has been paid more than $5 million for legal work for The Rock over the last seven years.
QTI has taken aim at Mr Maxwell, claiming he has “telegraphed his faith in the future of The Rock by selling his shares in the company”.
About 40 people attended a shareholders meeting at Brothers Leagues Club in Rockhampton yesterday which aimed to rally support for the proposals ahead of The Rock's upcoming annual general meeting.
Mr Daly, who lost his position at the Lehman Brothers-owned Grange Securities in July last year, yesterday laughed at suggestions he was looking for a job.
“My time is fully occupied as an independent non executive director on a number of company boards including QTI and Tamawood,” he said.
Also the director of two unlisted public companies, Mr Daly plans to accept another non-executive role at a public company later in the year.
The move by QTI comes after last year's failed attempt by Brisbane based shareholder First-Mac to get a seat on the board.
In a letter to shareholders of The Rock, QTI said The Rock needed to raise capital simply to pay the final dividend for 2009.
But Mr Maxwell refuted this, saying it was an uninformed claim.
“Capital is a pre-requisite to the growth of the company,” he said.
“We have planned for future significant growth during the next 12 months and beyond and this capital will enable us to fulfil those plans.”
Earlier this week The Rock announced it had successfully raised approximately $6.3 million after selling of 2.67 million shares to certain investors at $2.36 per share.
Mr Maxwell said The Rock had performed extremely well through the financial crisis, recording only a 3% drop in profit in 2009 compared to the losses experienced by major banks which were in the vicinity of 40% and 24% for credit unions and building societies.
He also said the company had forecast a profit of between $4.8 and $5.3 million next year.
A financial planner by profession, Mr Maxwell explained the sale of his shares in The Rock by saying he practiced what he preached.
“It is a basic to financial planning strategy that you don't put all your eggs in one basket and so I keep a balanced portfolio of investments,” he said.
The board of The Rock Building Society said it will defer its annual meeting by a week to November 5, in order to cater to the proposals.