Sifting through these troubled property trusts is depressing me. Not because they’ve lost so much money, nor because they are so unloved. This is depressing me because some of the leadership behaviour leaves a lot to be desired.
Peter Hurley is Managing Director of Valad Property Group. He’s has been in the role since 1997 (joint MD up until 2004) and has overseen the destruction of at least $2.1bn of shareholder wealth. Valad has $2.5bn in contributed equity which is now worth, according to the accountants, $381m. The market attributes a value of $144m.
People may be incompetent, overly enthusiastic or victims of circumstance. None of those are reasons to dislike someone. But I expect those in charge when investors lose a fortune to at least show some contrition.
Peter Hurley’s cash salary in 2010 was $689,677. If I were Managing Director of Valad and had overseen such a disaster, I’d be working for next to nothing while I tried to recoup some value.
That, I realise, is expecting too much. Hurley takes the prize, though, for putting his hand out for an additional $940,000 retention payment. A retention payment!
Another $940,000 retention payment, relating to the 2009 financial year, was also disclosed in this year’s annual report that wasn’t included in last year’s.
So Valad has paid Peter Hurley, the man who has overseen more than $2bn in losses, $1.84m of additional cash just to ensure he hangs around. That’s on top of an already absurd salary and in contravention of shareholders’ wishes. Indeed, at the 2008 AGM, 76% of votes cast were against the the remuneration report that gave rise to these payments.
Working in the finance industry for many years, I have become somewhat impervious to disappointing human behaviour. Analysing the behaviour of Valad’s board and management team, however, still makes my stomach churn.
Ready to invest?
Visit this page for more information on how to invest with Forager.
Forager Funds is a boutique fund manager specialising in a value investing approach. We offer an ASX listed Australian Shares Fund as well as an International Shares Fund both aimed at delivering returns for long term investors.