UPDATE: Pryke plans charm offensive for re-election at delayed Contact AGM
UPDATED: Contact Energy's [NZX: CEN] interim chairman, Phil Pryke, is planning a campaign of approaches to institutional and retail investors in the company as he oversees the search for a new chairperson and prepares for a likely battle to be re-elected to the board of the company he helped found in 1995.
In an interview with BusinessDesk this morning, Mr Pryke said he would not seek the chairmanship again – a role he held between 1995 and 2004, before Origin Energy bought a majority shareholding from the company's first cornerstone investor, Californian company Edison Mission Energy. Origin sold its 53.1 percent shareholding in Contact earlier this month.
Pryke says he wants to remain on the Contact board and will face re-election at the annual meeting, which will be delayed until December to allow a search process to identify at least a new chairperson, if not two to three other new directors to complement the two whose positions are secure for now: Whaimutu Dewes and former Chorus chairwoman Sue Sheldon.
While former Origin appointee Bruce Beeren, who remained on the Contact board after leaving Origin, would have been up for re-election rather than Mr Pryke, his departure at the annual meeting was announced today, exposing Mr Pryke to an election by shareholders with whom he has had a long-standing fractious relationship.
Mr Pryke was criticised for recommending a 2001 takeover offer by EME and for supporting the 2006 proposal from Origin to merge with Contact, as well his aggressive pursuit of higher directors' fees at various times through the 2000s and for supporting related party transactions with Origin, such as the purchase of the Rockgas LPG business at a price judged by many analysts to be too favourable to Origin.
Asked about his reputation with investors, Pryke told BusinessDesk: "I look back on those things, particularly in the earlier days. There are some things one wouldn't do the same way."
That included the way he had pursued fee increases for directors and his muted commentary on the finely balanced merits of the 2001 EME takeover bid.
"The EME proposal was a very, very, very marginal call and I think on reflection I would have been a lot more vocal about just how marginal that call was at the time. Of course, about two years after that, the share price was still soft. But that's all history.
"The big one that I still think about occasionally is the proposed [Contact-Origin] merger, where I had a senior investment manager say to me the other day: 'you were right, Phil'. But there's no real comfort in that."
On his nemesis through the 2000s, former Shareholders Association president Bruce Sheppard, Mr Pryke said Mr Sheppard was "one of the most wasted talents in New Zealand."
"He contributed hugely to engagement but his grandstanding just undermined what he did," said Pryke of the horned helmet-wearing crusader for shareholders' rights, who awarded Mr Pryke the association's inaugural, now discontinued, Golden Glob award in 2002.
The most important role for the remaining members of the Contact board was to find a new chairperson who would lead the company into a likely period of disruptive change in the electricity industry, akin to the impact of digital technology on the telecommunications sector from the mid-1990s.
"A similar set of things will happen in customerland in the electricity sector, except the cycle time will be faster," he said. "The focus of control over consumption is shifting from the producer to the customer. The question you've got to ask is, to the extent that the margins still exist, how do you efficiently serve customers to get better control of their capturing of some of that margin?"
For example, that might include helping customers to afford batteries to store solar power generated on roof-top generators, and find mutually beneficial ways for power companies and consumers to profit from excess production from home-generation units.
"I think I've got lots to contribute to all of that but I don't think I have the customer experience or large organisational change experience that all of that implies for Contact," Mr Pryke said.
Delaying the annual meeting would allow time to identify a new chairperson and he hoped some targets for additional directors would be identified by then, for a six to seven member board.
"Quite a lot of effort will go into getting close to shareholders and other stakeholders, particularly given the changes that will take place in customerland," said Mr Pryke, who believed major shareholder relationships had been "somewhat neglected" during Origin's tenure.