CHAIR’S ADDRESS TO CLINUVEL ANNUAL GENERAL MEETING
I am up for re-election today, thank you for those who supported me. Sorry for my English, since I do business all day in Dutch.
I am speaking as Chairman of the Board today, also as Head of the Remuneration Committee and big investor in CLINUVEL.
The health of this Company and continuity of this Company is my great concern.
We have seen that a small group of online investors are trying to influence other new shareholders with years of nonsense information. And since the Company is just starting to grow the spread of bad words online helps the short sellers and hurts all of us, including me as an investor and those who spread news.
It is value destruction in the most stupid form I have come across. I have a very simple lesson in life: if I don’t like a place or investment I leave and go where there a is better opportunity, but these shareholders do not want to sell.
This AGM shows the faults in the Australian system. In broad terms, 70% of CLINUVEL’s shareholders are not voting, 30% are voting. The voting preferences of these 30% are deciding whether a remuneration report which incentivises a management team to increase the value of CLINUVEL seven times, to A$7.5 billion over four years, is supported.
If my management team succeeds, I would have turned my investment from A$13 million to A$200 million in five years. I can’t say no to that! Even if my team triples it, I get more than from any bank!
Now we have the funny situation that a minority number of owners are influencing the direction of CLINUVEL for the rest.
It would also be funny if the majority support my re-election, given I have supported the performance rights plan and remuneration report to the shareholders. So where is the logical mind?
Of course, as a Chairman of the Board we need to listen to our shareholders, and the great majority applauds CLINUVEL’s achievements and successes. Of course, things can always be better, but I see that CLINUVEL is in a unique place, having come through all difficult achievements where others failed. The majority wants this to continue.
As a Board, we will consider all feedback and speak among ourselves and with external legal advisors. But, at the end of the day, I cannot allow the minority trying to destabilise and destroy value. I have to protect the interests of the vast majority.
I don’t know everything about pharmaceuticals, but have learned much the last 15 years. I do know many things about commercial enterprises in all corners of the world, having backed many entrepreneurs and having run more than 50 companies in my life.
If a management feels there is no environment to work in, destabilisation will happen slowly. We will always find new management, but in this specific business I am not sure it will be successful, and I am not willing to bet on this. CLINUVEL is not a betting station.
I will send out a letter soon to all investors, institutions and proxy advisors to explain how irrational this outcome is for the long-term for CLINUVEL and explain there will be no winners, no matter how good the Company is now and how good the next people are.
If changes need to be made, it will take one or two years to restructure and find a better direction for CLINUVEL, if there is one. In Dutch there is a saying, never change a winning team, I hope it exists in Australia also.