CPA rebels crowdfund legal action against old board
by Myriam Robin AFR 13 August 2018
When Alex Malley packed his bags at membership-based accounting industry body CPA Australia, his $4.9 million golden parachute included a termination payment equivalent to three times his annual salary. In October 2016, some nine months after this column began writing about CPA's governance issues, CPA's board quietly increased this payment, even though an earlier review had found the two-year termination payment previously included in his contract was overly generous.
And it was. Despite all Malley's claims to corporate success, for which he claims he was appropriately rewarded, the fact remains that he led an accounting standards and accreditation body. CPA isn't an ASX titan. For such listed titans, the maximum such termination payment for chiefs is one-year's base pay, unless shareholder approval is sought.
Malley's outrageous payout is long gone, and impossible to claw back. But for CPA's dissident members, the prospect of taking action against CPA's then-board, who approved the bizarre payment, remains.
The board at the time included chair Tyrone Carlin, deputy presidents Jim Dickson and Deborah Ong, as well as Richard Petty, Graeme Wade, Kerry Ryan, Michelle Dolin, Jennifer Lang, Sharon Portelli, Richard Alston, David Spong, and Martin Hourigan. According to the review of governance at CPA handed down in December by Ian McPhee, the decision to approve the increase in termination pay was unanimous.
Central coast accountant Brett Stevenson, a key CPA dissident in the member revolt that overthrew Malley, has since late last week been collecting pledges from CPA members (and interested members of the public) to see if there's appetite for crowd-funding a legal action. As of midday Monday, $181,170 had been pledged, around a fifth of the $1 million he figures he needs to make a go of it.
At the moment, the preferred strategy is to undertake a derivative action (which requires court approval) on behalf of CPA Australia against the then-board for not acting in CPA's best interests.
CPA said it would not support Stevenson's acton. Which isn't unexpected. While admitting the payout issue continued to dominate his discussions with members, new chair Peter Wilson wrote in February that the new board inquired about the duties owed by past directors, and had little hope of redress. "We met with a leading Queen's Counsel in both the corporations and employment law fields. The board is of the view there is no basis for legal action."
Stevenson told us he disagrees, as does the legal advice he's received along with, he suggests, "the most basic common sense".
https://www.afr.com/brand/rear-window/c ... 813-h13wai
|Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594|
A good summary of where we are up to by Joe Aston of the AFR, linked to from here: viewtopic.php?f=5&p=4137#p4137
If you are new to this website read the story so far: viewtopic.php?t=321#p1793
Check out some of the AFR articles, too many to list and check out some of the ABC reports: http://www.afr.com/business/accounting/ ... 215-h055ej http://www.afr.com/business/accounting/ ... 211-h02x1d http://www.abc.net.au/news/programs/the ... s,/8626662
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