Investors in Australia’s largest polluting company have rebelled against its management by electing four new board members proposed by minority shareholder and software billionaire Mike Cannon-Brookes.
The billionaire’s nominees — including former Foster’s chief executive John Pollaers and former Tesla Energy director Mark Twidell — will now hold four of energy company AGL’s nine seats.
The board, led by chair Patricia McKenzie, had opposed three of the four nominees being elected but shareholders overwhelmingly backed Cannon-Brookes, whose Grok Ventures owns more than 11 per cent of the shares.
The success of Cannon-Brookes’ activist campaign reflects frustration at AGL’s performance — its shares have fallen by about 70 per cent in the past five years — but also agitation with the country’s energy sector, which remains reliant on coal.
That slow transition has attracted private equity bidders. Origin, a rival to AGL, agreed to a potential $12bn takeover from Brookfield and EIG Partners this month.
AGL, one of Australia’s oldest companies and its largest energy business, has been locked in a battle with Cannon-Brookes, a co-founder of software developer Atlassian, for most of the year. He joined forces with Brookfield to bid for the business in February and planned to use AGL’s balance sheet and large customer base to accelerate its transition to renewable energy.
The bid attempt failed — and Brookfield moved on to Origin — but the billionaire bought a minority stake in AGL and successfully derailed a long-planned demerger of its coal-fired plants after shareholders backed his opposition to the plan in May.
That triggered the exit of AGL’s top management and a battle between McKenzie and the billionaire for control, including the appointment of new board members and a chief executive to lead a new transition plan for the energy company.
Kerry Schott, a former Sydney Water and Deutsche Bank executive, and Christine Holman, a former Telstra executive, will also join the board following the shareholder vote, which was held at a recital hall in Melbourne on Tuesday.
Grok said the election of its nominees represented a “desire for change” from the energy company’s shareholders.
McKenzie told the annual meeting that she expected the new board to continue to work toward the implementation of its plan to turn off coal-fired power stations by 2035.
Brynn O’Brien, executive director of The Australasian Centre for Corporate Responsibility, said that the vote was a victory for shareholders but also a “scathing indictment on those who spent years destroying shareholder value by delaying the inevitable in the face of an escalating energy transition”.
O’Brien added: “History has been made today. The board of an Australian listed company has been transformed by shareholders over its handling of climate risks.”
AGL’s shares have risen 14 per cent in the past month in the lead up to the vote and on the back of the Origin bid. Meanwhile Atlassian, which is listed on Nasdaq, slumped by almost a quarter earlier this month after disappointing first-quarter growth numbers. The stock is down 62 per cent since the start of the year.