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Mortgage Choice chair blasts proxy firms

AAP logoAAP 18/10/2016 Tom Rabe

Departing Mortgage Choice chairman Peter Ritchie has launched an attack on proxy advisers, saying they are hurting Australia with "thoughtless recommendations", and questioned their level of influence in the nation's boardrooms.

Mr Ritchie, who said Tuesday's annual general meeting would be his last, took a parting shot at proxy advisers for recommending a vote against the company's renumeration package.

The former McDonalds Australia chairman took exception to recommendations by proxy advisers to oppose the remuneration package because it paid dividends to executives on unvested incentive shares and because the CEO received 100 per cent of bonus in past years.

"I think most people are inspired if they are succeeding," Mr Ritchie said.

"Just failing to get there each year is not where I want my CEO."

Mr Ritchie said the most damaging of the proxy advice was to vote against the re-election of senior directors Deborah Ralston and Rodney Higgins, who kept their positions in votes taken on Tuesday.

"They are recommending that we throw off our board the most senior of our founding partners ... and Dr Ralston, who is one of the most respected women in the finance industry in Australia," he said.

The remuneration package was overwhelmingly voted down after his speech, resulting in the third "strike" in as many years against the mortgage lender.

Mortgage Choice narrowly avoided a board spill in 2015, when a second strike - incurred after more than 25 per cent of shareholders voted no to the remuneration report - forced the board to stand for re-election.

Mr Ritchie said if shareholders continued to take proxy firms' "cookie cutter" advice, they ran the risk of being left with boards that were too independent.

"How and why have we allowed these remote advisers to have so much influence in the Australian business community?" Mr Ritchie asked.

"Here's how they are hurting Australia - it's those sort of thoughtless recommendations which are resulting in boards who are so independent they don't know what business they are in.

"How did Woolworths get to the point where they have no retailers on board...or BHP find themselves without a miner?"

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