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17 November 2005

Lend Lease 2005 Annual General Meeting - Summary of discussion on resolutions and Questions & Answers
Agenda Item 1 – General Q&A Session

Shareholder # 1: You mentioned that seven employees were killed on your sites during the year. This is very sad, this is very tragic and I do hope that our Company will show extra special efforts to secure solid compensation for those peoples' families who are involved.

Now, my report card on Lend Lease Corporation Limited is a very significant eight marks out of ten. I think you have done very well with the Financial Snapshot on page 6, followed by the Key Financial Summary on page 7, and that gives us confidence and comfort and certainty for a better 2006 year.

As a comment, the net debt to equity ratio is at a very low historical level of 17-18%, and I looked in the profile page 60 and it is the lowest for five years. That's very good indeed.

You've increased core profits, as your slide says, your earnings per share growth is 26%, your dividends have gone to 57 cents, the pay-out ratio is 73%, up from 6%. Again, another credit.

My first question is about franking and unfranked dividends. We got 29 cents fully franked and we got 28 cents unfranked, making it 57 cents dividend for the year. That's very good. I heard you in your Chairman's address mention we want more franking. Well, you may be able to go into that a bit deeper, because we have expectations as shareholders. We need fully franked dividends, not the unfranked ones, which help with credit with the Taxation Office.

My second question is that I would like to have some additional information on what I don't quite understand in the Annual Report – "sales lot backlog". It's three technical words and very income earning words I believe. It is something new. Now, if it is connected to the Crosby Group, I would like to know, sir, what specialities this Company has got. What standards and values has the Crosby Group got and how good are they in Birmingham, Manchester and Leeds area?

David Crawford: I do appreciate the comments you made. I think the Board agrees with you that management have done a really good job this year and they are to be congratulated.

On a sombre note, the seven employees who were killed is an extremely serious and sad note for the Company. I would just like to assure you and the rest of the shareholders that the Board and senior management are absolutely committed to the concept which Greg referred to – Injury and Incident Free.

It will probably interest you to know we have had two days of Board meetings this week and on the first day we had a very detailed presentation from our Head of Occupational Health And Safety, where he reported on the visits that he makes around the world and the endeavours that are being made to improve safety on all of our sites Then again yesterday, we had our independent expert come in and report to the Board on how he is assessing the performance of the Company as we move towards Incident and Injury Free.

It is an educational process. It requires us putting procedures in place. It requires us to live those policies and procedures day in, day out, not just when we are at work, but when we are at home. We believe fundamentally that every employee of ours who comes to work in the morning deserves to go home in exactly the same condition at night. Greg has put out a very clear statement to all of our employees – if it is not safe you cannot do it, you should not do it, and everyone is instructed that if they see somebody in the workforce doing something which is not safe, that they have the right to go up and stop the person from doing it.

It is a very, very high priority for the Company and the Board totally supports that.

On your specific questions, the first one relates to franking, and it was pleasing that we were able to return to paying franked dividends last year. Subject to no foreseen circumstances, like a tsunami that hits this Company, we expect to be paying fully franked dividends for the current year.

In terms of your question relating to or requesting information on sales backlog, I think it is probably better if I hand over to the man who really knows what it is about and ask Greg to respond.

Greg Clarke: With respect to sales lot backlog, what we try to do is identify the profit captured in land or unit construction that is already under contract. So if you take Delfin, for example, we will have a number of units in land we have control over, either through direct ownership or through joint ventures with our partner land owners. So if you add those together with the number of units under construction or under planned construction where we have ownership of the land, that gives the backlog units. They could either be plots of land sold by Delfin or apartment units sold in the UK or Australia. So that gives a future measure of profitability.

With respect to Crosby, the business itself operates outside London. We had a very good inner urban development business in London which captured a number of opportunities, including Greenwich Peninsula. However, as you saw from my presentation, the UK has a shortage of dwellings nationwide and the UK Government wanted partnership across the whole country, not just London and the south east.

We saw an opportunity to acquire a top-end, premium unit developer called Crosby, who enjoys upper quartile margins, a wonderful brand and a very strong track record in the industry going back many years. We saw the value set of the management team and the employees as consistent with Lend Lease. They were after long-term business relationships, high quality, ethical standards of work and working safely, and we believe that will be an excellent addition to the Lend Lease family.

Agenda Item 2 – Election of Directors

The following resolutions relate to the election of directors and we are happy for shareholders to ask questions of those being nominated.

2(a) Election of David Ryan as a Director

David's abilities were well known to me when I asked him to chair our due diligence committee for the proposed merger with GPT. My fellow directors became, and were, similarly impressed with the contribution he made to our deliberations. We were therefore delighted when he accepted our invitation to join the Board in September last year and the Board unanimously endorses David's election.

I will now ask David to say a few words.

David Ryan: Thank you, Chairman. Good morning, ladies and gentlemen. From a personal perspective, I am 54 years old, happily married, have four children, two of whom will start kindergarten next year.

From an academic perspective, I obtained a Bachelor of Business Studies, majoring in accounting and finance, approximately 30 years ago, give or take a couple of years. I am a fellow of the Australian Institute of Company Directors and a fellow of CPA Australia.

From a public company board perspective, I have over a decade of experience as a non-executive independent director. I have chaired a number of different companies and have been a member of or chairman of audit, remuneration, risk management and governance committees for a number of different public companies.

I therefore have a good number of years of experience in the fields that I have mentioned earlier to draw upon during Board deliberations and discussions. I am proud to be involved with Lend Lease. The Group has had in recent times some difficult times but has now, however, emerged as a property group that is passionate about safely creating, building, managing and owning inventive, sustainable people places.

Passionate is not a word often used amongst the blizzard of corporate jargon which is used these days to allegedly inform all the stakeholders in a company. The jargon used often misinforms us rather than informs us, but as you would have heard in the tone of Greg's Managing Director's report, passion is something that has been re-instilled in the Group.

As well as undertaking the functions of a Non-Executive Director in Board deliberations, I have the added role of Chairman of the Audit and Risk Management Committee. This is a role that allows me to see your management team in action during the periods between formal Board meetings and committee meetings. We schedule regular meetings with finance and operating folks, with and without the external auditors. Barely a week will pass where we are not informally chatting about a variety of accounting, finance and risk issues.

As Greg clearly articulated, the Group is passionate about safety. He and we believe that everyone who is engaged with the Group, both directly and indirectly, have the right to expect us to do everything we can to ensure they return safely to their families each night, and I carefully say directly and indirectly. It is not just our employees, it is the employees of people who are on our sites all around the world.

The Incident and Injury Free program is being embedded into the corporation as a core value and is one that the Risk Management and Audit Committee embraces and monitors closely, in addition to the embracing of that program by the Board and the monitoring by the full Board. I passionately believe in safety personally and have done so for many years.

I believe that a combination of the decade of operational management experience with the financial skills that I acquired through a period in investment banking over a 20-year period positioned me well to contribute with my fellow Directors to the strategic thinking of your excellent management team.

Thank you, Chairman, for the opportunity to present my credentials to the Board today.

David Crawford: Thank you, David, and well done. One thing I recall you left off that resume is you once were a grade player in the code of rugby I think it is up here.

David Ryan: For a few years.

David Crawford: Ladies and gentlemen, is there any discussion or do any shareholders have any questions they would like to put to David?

Shareholder # 1: I read Mr Ryan's profile and I am indeed a little bit taken by it all. As always, I have an odd comment or question. I read his profile and he's a busy man with Transurban Holdings Limited, ABC Learning Centres and Tooth & Co.

What is good is that this man seems to have great diversity and great background. He attended seven Board meetings out of seven that he was asked to attend, and that's something very good. You have 17 Board meetings in a year. Well, that must be triumphant for the Board members. They're certainly busy and must leave their homes.

So I have two questions to help us all. How much do you think Mr David Ryan is to get for a full year's service as Non-Executive Director of Lend Lease? He only joined on 10 September 2004, so he only had six months and therefore his remuneration is not the full 12 months. So what is the ballpark figure for a man coming on the Board now? How much does he get for being Chairman of the Risk Management and Audit Committee? I believe there would be perhaps a separate amount of money for that. So if you could answer those two questions, it all helps us to understand the finances of a company like this. Thank you.

David Crawford: In response to your observations about the Directors attending 17 meetings, I hasten to inform you it was a very busy year because of the proposed GPT merger and that certainly added to the workload. But we are planning to return to the more normal number of Board meetings, where I think we have between eight and ten, depending upon circumstances. But we do, and I stress this is important, because we are operating internationally, a number of our Board meetings are offshore which requires much more time and then we take the opportunity when we go offshore to visit sites and meet with local management.

In terms of the Non-Executive Directors' fees, if I could just refer you specifically to page 47 of the Annual Report which details what the fees are. The standard fee for a Non-Executive Director on an annual basis is $105,000 per annum and then Chairmen of Board Committees receive an additional $25,000.

Shareholder # 2: I have been a shareholder for two years now. I have admired Mr Dick Dusseldorp who long ago founded this Company, and there have been some remarks by the head of the Westfield Group that it is no more as good, but it might take time now to bring it back to something like the Company it was under Dusseldorp, who sorry is dead.

There was a time when this Company looked like it [lost its way] with head office in Australia, in the United Kingdom, in America. The philosophers were in there, experts, but not practical people. Have we come back to the lean and mean management or are we getting that way? That's all.

David Crawford: Thank you. I think your question is not directly related to the election of Mr Ryan, but more a specific question about are we appropriately structured and have we got the right people in the senior management.

Can I look you in the eye, sir, and say absolutely. We are properly structured, we have got a great executive management team, we have got a superb CEO and the runs are on the board and you have seen the returns that we had this year.

Motion was carried

2(b) Election of Ross Taylor as a Director

I am sure Ross is well known to shareholders as a longstanding business leader at Lend Lease. After 20 years with the Group, he continues to impress the Board with his enthusiasm for the business and his deep knowledge of global real estate.

We asked Ross to join the Board so that we could benefit from his contribution to our strategic decision making and the Board unanimously endorses his election.

Ross will now say a few words.

Ross Taylor: Thanks, David. For me it is very exciting to join the Lend Lease Board and having the opportunity to work with a highly skilled and diverse group of people. For me it is yet another chance in my journey with Lend Lease to both contribute and to learn.

In terms of contribution, as David mentioned, I believe I bring some important skills and perspectives to the Board after 23 years in property and some 20 years in Lend Lease. My journey with Lend Lease to date has seen me work in all our operating geographies, live in three different continents, work in all areas of property, acquire, integrate and run global as well as regional businesses within Lend Lease, and more recently work with Greg Clarke and the Board and the other executives in right-footing Lend Lease so we could take advantage of the opportunities into our future.

Also, the 19 years I have spent in all the businesses around the world that make up Lend Lease have provided me with a unique insight into the people that make up our organisation in every country and every geography, both their strengths and their weaknesses, and where and what emphasis we will need to work with them in developing them to underpin the future strategies of our Group as we go forward.

So I genuinely look forward to working with the Board as we take the business forward, and with them meeting the commitments that we have made to all the shareholders of the Group.

Thank you.

Motion was carried

Agenda Item 3 – Remuneration Report

David Crawford: Because shareholders are voting on this for the first time, I think it is worth taking some time to discuss the process the Board goes through in setting remuneration.

The Group's remuneration policy for senior executives is set by our Personnel and Organisation Committee. In setting remuneration benchmarks, the Committee takes into account expert advice and relevant external comparators in real estate and related sectors, both in Australia and international markets in which we operate.

Based on this approach, senior executives' remuneration has three parts. The first is base salary, which is targeted to be around the median level of comparable companies. In addition to this are two at risk components, a short-term incentive and a long term incentive.

Short-term incentives are based on achieving specific performance targets, both financial and non-financial. The potential bonus for a senior executive is typically in a range of 60% to 80% of base salary, with the CEO having a potential to earn 120%.

The long-term incentive plan was introduced in 1999, and as its name suggests, it is designed to reward senior management for creating shareholder value over the longer term. The long-term incentive has evolved since inception. The current plan is based on measuring the total shareholder return of Lend Lease against a basket of comparable companies around the world.

The long-term incentive vests after three years on a sliding scale, based on how Lend Lease performs relative to a comparator set. If Lend Lease's performance is below the median after three years, no long-term incentive will be paid. If Lend Lease is at the median after three years, 25% of the bonus will vest, and if the Group is in the top quartile after three years 100% of the bonus will vest.

In summary, Lend Lease's remuneration model for senior executives is grounded on a solid methodology. It is benchmarked against leading international companies and is designed to reward senior management who increase shareholder value.

As I noted earlier, this is a non-binding vote. However, it provides an excellent opportunity for us to understand your views as the shareholders of Lend Lease.

Accordingly, I now ask for discussion, comments or questions.

Shareholder # 3 (Australian Shareholders’ Association representative): Mr Chairman, I think that Mr Dusseldorp, looking down on us from above, would be absolutely delighted with the efforts of Mr Clarke and his team over the last 12 months.

My question is about retirement benefits for Non-Executive Directors.

Firstly, let me preface my remarks by saying that the Australian Shareholders' Association recognises the need to appropriately remunerate good staff to be able to obtain the sorts of results that the Company's enjoyed over the last 12 months.

Our only caveat that we place on our support for the resolution is that we oppose retirement benefits for Non-Executive Directors on this premise: In the past in past years the Company did lose its way for a while and we consider that the role of the Non-Executive Director is a very crucial one in the sense that if the Non-Executive Director has retirement benefits in escrow in some form or other, it may prospectively influence his decision at a Board meeting when perhaps he should speak out and then may feel that he may not wish to speak out, because he might feel he is risking his retirement benefits by so doing. Given that the Company has previously lost its way, not taking away from the magnificent efforts of all of you more recently, we do oppose these retirement benefits and ask that you give consideration to terminating them in future years.

David Crawford: Thank you, and you were kind enough to chat with me before the meeting, and I certainly appreciated that opportunity to talk and for your words of support for what has happened in the last 12 months.

It is interesting to note that in 2000 the Lend Lease shareholders approved the replacement of the defined benefits retirement scheme for Non-Executive Directors, and under that scheme which was then in existence benefits increased with years of service. We changed that, which is what I call the old style directors retirement benefits scheme, with the current scheme.

The current scheme is a share based scheme and under this scheme the benefits payable to directors on retirement really depend upon the value of Lend Lease shares at the time that they retire, and the Board does believe that providing part of the Non-Executive Director compensation in restricted shares, and the scheme is a restricted share scheme, brings greater alignment of Non-Executive Directors’ and shareholders’ interests.

However, as we always note the shareholder comments, we note the comments of other commentators and we will take them on Board as we address the issue of directors’ remuneration going forward. But thank you for your comments.

Shareholder # 1: Thank you. It is a new device, a new system, a new procedure, this remuneration report, and we are all on an expanded and far more involved learning curve as we examine new company laws on more disclosure, additional disclosure, on salaries for all directors, which are on pages 48 and 49, and for the top management of two executive directors, as disclosed on pages 50 and 51.

I do believe, sir, in the old days we only had to give salaries and packages on the five top executives. Now it is ten top executives, which may be better.

We have an advisory vote, as you have stated, sir, to tell the Company whether we accept this remuneration package and disclosures or whether we reject it. Some companies have had 20% rejection voting for it. I know we won’t.

And after examining the base salary, number A, important item, and part B, the short-term incentives and part C the long-term incentives for ten top management executives, I would vote, Mr Crawford, to accept the salary packages as disclosed over the many pages, and I also would add, sir, the Non-Executive Directors, I believe, are getting quite well paid myself, but that may be open for further discussion when the next resolution comes up for an increase in fees for directors.

But, sir, I find that the amount of money, or the amounts of money that are provided for all the ten top executives, and for I think our seven Non-Executive Directors, are fair and reasonable compared to many other companies in Australia, and I think again, sir, it has been quite well set out, although I do think that some of the footnotes could be made a larger font for next year.

Thank you.

David Crawford: Thank you. Can I say I definitely agree with the last comment. Each year that goes past I like the font to increase.

Motion was carried

Agenda Item 3 – Directors’ Fees

David Crawford: We have received a number of questions from shareholders about directors' remuneration, and I would now like to give some background on the thinking behind the proposed increase.

Directors hold ultimate responsibility for corporate governance, setting the Group's strategy and appointing the Chief Executive Officer. For this reason, the fees paid to directors need to be competitive, allowing the Company to attract, motivate and retain candidates of international standing.

The maximum aggregate fees for Lend Lease Corporation were last reviewed five years ago in November 2000. Since then, the demands on directors have increased significantly, including greater legal accountability and increased corporate governance compliance.

In line with these growing demands, Non-Executive Directors' responsibilities and time commitments have also grown. In addition, the Directors of Lend Lease have an unusually onerous travel commitment. For example, this year the Board met outside Australia on four occasions. As well as these scheduled overseas meetings, individual Non-Executive Directors regularly visited projects in regional offices to gain first hand knowledge of the Company's businesses and people.

To help the Company secure qualified directors, the Board is seeking shareholder approval to increase the maximum aggregate directors' fees to A$1.7 million. The current maximum is US$900,000 which shareholders approved, as I said, at the 2000 AGM.

This approval reflected the exchange rates at that time, and the US$900,000 equated at that time to A$1,665,000. Under current exchange rates, that is at 30 September 2005, this amounts converts to A$1,185,000, a relative decrease of A$482,000.

By approving this increase, denominated in Australian dollars, shareholders will address this devaluation. On current exchange rates, at 30 September 2005, the proposed increase amounts to A$517,000.

I should point out that the Directors do not make any recommendation in respect of this resolution, given the interests of Non-Executive Directors. However, as Chairman, I intend to vote undirected proxies in favour of the resolution.

I will now open the floor to questions or comments.

Shareholder # 1: Mr David Crawford, I have just found myself in a bit of a quandary and with a couple of problems over the increase in fees for Directors, the last resolution or motion on the floor I believe.

Whilst the Explanatory Notes do set out several figures, I find them a little bit confusing. I suppose it was very odd that we started off several years ago in denominating United States dollars for the directors' fees. I think you said the figure was $900,000. I think that was unfortunate because we should have been keeping to Australian dollars I do believe. Maybe you could inform us why that was done several years ago. After all, we weren't very big in America in those previous years.

Anyway, I am very pleased to see, sir, as my comment at the moment, that we are back to Australian dollars, and I think that perhaps we have to increase the pool of money to be paid to Non-Executive Directors.

One question was, of course, whether this would be enough, looking down the track, as most companies do, for the next three or four or even five years. I don't know whether that has been taken care of. I suppose it has. But a good supplementary question would be: When do you think that you might be coming back to us again for an increase in directors' fees?

Yes, we all know the motherhood statement that there are so many new laws by the Corporations Act, by ASIC, by the Australian Stock Exchange, and goodness knows what else, but I feel that overall the amount of money that you are trying to claim – I believe A$517,000 increase – is fair and reasonable.

I was just wondering though whether our Constitution states what the increase has to be, as in your resolution or motion it doesn't. It just says that we get an aggregate or a total that we would like to get. But it is just one of those peculiar, pedantic things of mine. I thought that we could have said in the resolution that the $517,000 figure would be there in that resolution to bring it up to I believe $1,700,000.

David Crawford: Thank you. I am afraid I wasn't around in 2000 when they set the fees then in US dollars, but if I listen to the folklore around the Company, it seems that at that time there were a number of Directors on the Board who were actually resident in the US and so it was thought convenient.

As I wasn't there I can’t be sure, but it seems as though there was no recognition at that time of dealing with currency fluctuations, but I agree with you, we are an Australian based Company, our head office is here in Australia, our accounts are denominated in A dollars, the remuneration should be set in A dollars. So that is what we are doing.

Insofar as your questions about the Constitution, could I ask Mr Crewes to speak with you in detail after the meeting, rather than have the rest of us caught up in a review of the Constitution. But thank you for your comments.

Motion was carried

David Crawford: Ladies and gentlemen, that concludes the formal business. However, if there is a shareholder who wishes to ask a final and important question, please come down to the microphones now and take your opportunity.

Shareholder # 4: Yes, I was looking through the book at the time and I think Mr Clarke mentioned in part of his speech about a project at Wilton. Is that correct? Has it started at all? Actually why I am asking is because I've worked in the area all my life virtually, and I have got an interest in knowing what goes on around the area. I don't live there now of course. But is it going to be similar to south, and of course I was only out there at Campbelltown the other day and I see that the new Macarthur shopping centre, the big expansion, I haven't been down there for quite some time, but is it similar to what is south of the shopping centre, a big housing development like that?

Greg Clarke: It is a Delfin residential development, which will be a very high quality, single family homes, built in the standard Delfin brand and style. So it will be sort of medium density, single family homes.

Shareholder # 4: And the main access to go into it, will you be using the M5?

Greg Clarke: I must say I am running out of information at this point of time.

David Crawford: Could I suggest, sir, that this is a question which is of immense importance to you I am sure, but I am not sure the rest of the meeting needs to listen to it. We have got Rod Fehring here, who is the head of Delfin Lend Lease. Rod, could you stand up and just identify yourself and maybe you two could have a chat on this issue at the conclusion of the meeting.

Are there any other, as I did indicate, important questions?

Shareholder # 3: Yes, Mr Chairman. Does the Group on an ongoing basis vet prospective opportunities in places such as Germany and Slovenia? I know they are outside the immediate geographical mix and there is no suggestion the Group should fragment its efforts in this regard, but does the Group monitor ongoing prospective opportunities in nearby locations to where it is currently operating?

David Crawford: Thank you, I will ask Greg.

Greg Clarke: We do monitor opportunities around the world. Most of our balance sheet is invested in Australia, the UK and the USA. We do have a global footprint dealing with major customers, such as BP, and we service those in those geographies.

We tend to do limited project management and construction management work in geographies such as Eastern Europe and Germany. We don't see it as a major opportunity to invest because our biggest issue is we have got 9,000 people, I think nearly 90% of which are tertiary educated, and our biggest limitation is the ability to retain and hire enough good people to grow our business fast enough. Our objective is to grow it in our three core geographies and not distract ourselves and over-commit ourselves in speculative geographies in the short to medium term.

David Crawford: Thanks, Greg. It would appear that there are no more pressing questions. Ladies and gentlemen, thank you very much for your attendance and your support. I declare the meeting closed.

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