Cabcharge chairman Russell Balding defended the appointment of Rodney Gilmour as a director after he resigned on Monday evening before what was expected to be a big vote against him was revealed at its annual meeting.
At a fiery AGM on Wednesday – in which Mr Balding also said he had written to the Prime Minister and state leaders asking them to stop the "dangerous and "illegal" rival Uber X – he refused to reveal what the proxy votes were for Mr Gilmour, whose resignation was announced on Tuesday evening. Proxy advisers Ownership Matters and ISS told investors before the AGM they should reject him due to his lack of independence.
Mr Balding, who was re-elected to the board, said Mr Gilmour was not appointed as an independent director. He claimed he resigned for "personal" reasons and his experience in the transport sector and advising on policy for the taxi industry gave him strong qualifications for the role. "I have worked with Rod before, I know he is very professional, his integrity is beyond reproach but more importantly, the skills he would have brought to the table is in regulation of transport from the Ministry of Transport," he said.
Mr Gilmour was a consultant to Cabcharge for two years until April. On Tuesday Mr Balding revealed he received a total of $426,000 in that time. Mr Gilmour was also general manager of corporate affairs, planning and human resources at Sydney Airport from 2004 to 2011. Mr Balding was CEO of Sydney Airport from 2006 to 2011.
Investors and governance experts have long criticised the independence of the board under founder and executive chairman Reg Kermode, who died in late April. They say Mr Balding should have replaced Mr Kermode, and another director who died, with independent non-executive directors.
The Cabcharge chairman said they would soon be announcing further independent directors. It is understood major investors in Cabcharge have been suggesting alternative independent director candidates to replace Mr Gilmour but none have been accepted to date.
The company also received a fourth consecutive "strike" against its remuneration report at the meeting since laws were passed in 2011 allowing a "spill motion" of boards after two consecutive strikes. The board has also received votes above 25 per cent against its executive pay as far back as 2008.
But despite the Australian Shareholders Association voting for a spill of the board for the first time, most shareholders voted against this for the second time in four years.
Investors also voted against shareholder activist Stephen Mayne's election to the board. Mr Mayne, who holds 20 shares in Cabcharge, said he was "frustrated" with a lack of governance improvements. If elected, he would have resigned from the board after a year as long as three truly independent directors are appointed, and it has the expertise to fend off numerous online challengers. He asked why board members held so few shares in the company and questioned the 18-year tenure and independence of two of the board members, including Donnald McMichael who is classed as independent, and deputy chairman Neill Ford who is also managing director of Yellow Cabs (Qld), which has received $6.5 million during the past two financial years from Cabcharge. He is also head of Cabcharge's corporate governance committee.
Mr Balding said he was "comfortable" with Mr Ford's position. Mr Ford countered that he sold his shares in Cabcharge in the past because he was criticised for holding too many.
New CEO Andrew Skelton said while transaction turnover had increased by 31 per cent, it had lost $7 million in revenue since the halving of the electronic payment fee by the Victorian Government in February. But he said they are working on a strategy to diversify earnings, as well as reducing numerous brands to a single one so they can market themselves better online to compete with app-based start-ups.
Shareholders also approved a new long-term bonus structure for Mr Skelton.
