This article is from the Australian Property Journal archive
LENDLEASE has bowed to growing investor pressure, announcing that chairman Michael Ullmer will retire at the November annual general meeting, as will director Nicola Wakefield Evans, but it is unlikely to appease disgruntled shareholders who are seeking to expedite a major board renewal following a string of controversies.
The company has been copping heated criticism from a number of key shareholders after a string of soft results and returns, and a downgrade to this year’s full-year result, with scepticism from investors around the benefits of its overseas activities.
“A formal process to appoint a new Australia-based chair has been initiated. We are looking to appoint an individual who has deep experience in real estate,” Lendlease said in a statement yesterday.
Aware Super, which holds a near-9% stake in Lendlease, this week called on Lendlease to shake-up its leadership, starting with the removal of Ullmer.
“We support much-needed board renewal with Aware Super having made clear its expectations for an accelerated transition to a new, independent and external chair,” Aware Super’s chief investment officer Damian Graham said.
Also among the vocal critics has been John Wylie’s Tanarra Capital, which called for “urgent board renewal” in a letter to Ullmer and CEO Tony Lombardo last month that criticised the company’s “arrogant” culture and argued that its international business should be jettisoned.
In its quest to simplify its business as part of a turnaround, Lendlease has just announced a $147 million agreement with Warburg Pincus to establish a 50/50 joint venture focussed on the growing life sciences real estate sector in the Asia Pacific.
Lombardo will face shareholders on Monday at an investors day.
In a statement yesterday, Ullmer said, “On a personal note, after 12 years on the Board, and almost six years as chairman, I believe that now is the time to commence the process of identifying and transitioning to a new chair.
“I will seek input over the coming weeks as part of my normal engagement with key stakeholders.
“It has been an honour to be a director and chairman of Lendlease and I look forward to working with my fellow directors to appoint the right chair to support the management team in implementing the decisive actions to simplify Lendlease and improve securityholder returns.”
Ullmer is on the board of Westpac and over his career has been a KPMG partner, deputy CEO and board member of National Australia Bank, and a director at Woolworths and Foster’s Group.
Ullmer added, “On behalf of the board, I would like to thank Nicola for her significant and valuable contribution to Lendlease and the board since her appointment in September 2013.
“Her extensive experience and expertise as a director and her exposure and insights across a number of sectors have been very valuable for Lendlease. I have personally appreciated Nicola’s counsel, professionalism, diligence and insights on a broad range of matters.”
To make matters more difficult for Lendlease, it has just been slapped with a surprise 112.1 million tax bill from the Australian Taxation Office regarding tax benefits related to its 2017 sale of a 25% stake in its $1.8 billion retirement living business. Lendlease said it is “confident of its position and will dispute the amended assessment”.
