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Fairfax CEO questioned over pay rise -

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Fairfax CEO questioned over pay rise

The World Today - Thursday, 13 November , 2008 12:22:00

ELEANOR HALL: And let's go now to another lively shareholders' meeting.

In Melbourne, Fairfax CEO David Kirk faced some angry journalists at the media company's annual
general meeting.

Journalists wanted to know why Mr Kirk has just given himself a pay rise of nearly 24 per cent when
he was citing cost issues to cut 116 editorial positions at the Sydney Morning Herald, The Age, and
The Sun Herald.

Shareholder activist Stephen Mayne called on Mr Kirk to resign.

Well, Bill Bainbridge was at the meeting for the ABC and he joins us now.

Bill, there has been a lot of publicity about the salary of the chief executive David Kirk, did he
defend his pay increase at the meeting today?

BILL BAINBRIDGE: He certainly did. He made several points. He said that his salary is not high and
the salary of the executive is not high compared to other similar companies. He said that the
salaries were dependent on the company hitting certain performance targets and he also made the
point that senior managers at Fairfax had had their base salaries frozen in this financial year.

Now the remuneration package was put to a vote. It was defeated by a show of hands but the 91 per
cent of the proxy votes that came in in favour of the remuneration package so David Kirk's salary
increase is quite safe.

ELEANOR HALL: Now Fairfax journalists were making their presence felt at the meeting. What did they
have to say?

BILL BAINBRIDGE: Yes, several used their shareholder status to ask questions. They are angry that
David Kirk has never addressed staff about the job losses and they are also angry about the size of
his package while flagship papers are losing editorial staff. They say that executives earn more
than the Federal Cabinet and that is out of all proportion for a newspaper company.

One journalist who was there was Michael Bachelard of the "Sunday Age" and I asked him about his

MICHAEL BACHELARD: Well, we have just been through a redundancy round where 550 people were lopped
off this company including about 14 per cent of the working journalists and you know, photographers
and so on.

At the same time we see the remuneration report gives the chief executive, David Kirk, a 23.8 per
cent pay rise to $3.41-million.

Now we have calculated that at the top sort of pay threshold that you can expect as a Fairfax
journalist at $115,000 that that buys 30 journalists and if you count his co-CEO Brian McCarthy in
there, you could buy 50 top quality journalists for this company.

And we are really asking the question, what is of more value to this company? A three and a half
million dollar pay packet for the chief executive or 50 top quality journalists?

ELEANOR HALL: That is journalist Michael Bachelard from the Sunday Age. So Bill was that view about
shedding jobs at Fairfax shared by other shareholders?

BILL BAINBRIDGE: Well, shareholders didn't direct, address that directly but one shareholder I
spoke to was Stephen Mayne, the well-known shareholder activist. He is more concerned about the
fall in the share price and about the large number of acquisitions that Fairfax has made recently
and about the failure to grasp some online opportunities.

He wasn't so concerned about the job losses. I spoke to Stephen Mayne outside the meeting.

STEPHEN MAYNE: I think the reality is they have to cut costs because it is just the new reality, so
sad as it is, they do have to lose hundreds of staff and that had to include more than 100

But equally, they should lose the CEO. They are paying him $3.4-million a year. He has gone on a
failed acquisition binge. They have got two CEOs at this company. They should put Brian McCarthy in
charge of the whole thing and they should save shareholders three and a half million a year by
getting rid of the chief executive, David Kirk.

ELEANOR HALL: That is shareholder activist Stephen Mayne and Bill Bainbridge at the Fairfax AGM in