Mineral Resources: Australian Shareholders Association to take chair James McClements to task over failures

Adrian Rauso

The Nightly

3 Min Read

21 Nov 2024

Mineral Resources managing director Chris Ellison, left, and company chairman James McClements. Credit: The West Australian

A powerful lobby group that represents Australia’s mum and dad investors plans to grill James McClements, the chair of Mineral Resources, over his lack of action in addressing the dodgy dealings of the company’s boss and founder Chris Ellison.

The Australian Shareholders Association will use MinRes’ blockbuster annual general meeting at Lathlain on Thursday to ask why Mr McClements dragged his feet in combating a raft of corporate governance failures engulfing the mining company.

Mr Ellison is poised to make his first public appearance at the AGM following revelations he had evaded tax on co-owned offshore companies, misused company resources for his own benefit, and allegedly profited on deals at the expense of MinRes shareholders.

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Many of these issues were known to the MinRes board for years but it failed to disclose them publicly until media reporting last month forced its hand.

“(MinRes) advised the ASX that this information was not released to the shareholders because it was materially price sensitive. Given the $1 billion effect on the company’s share price, can you still maintain this was a reasonable position to take?,” ASA representative John Campbell will ask.

Unlike previous AGMs, Mr Ellison will not front the media after he faces shareholders.

He is set to step down as MinRes chief within the next 12 to 18 months and Mr McClements has also signalled his intention to leave at, or before, next year’s AGM.

“The recent allegations about Mr Ellison’s past dealing(s) and the failure of the board to disclose these until their revelation in the press at the assumed instigation of a whistleblower casts significant doubt on past governance effectiveness,” the ASA said.

“We shall ask why the chairman failed to take action earlier with respect to a number of matters dealt.

James McClements, chair of Mineral Resources, will cop a blast at the AGM from a lobby group representing mum and dad investors Credit: Unknown/Mineral Resources

“We also note that the chairman is a UK resident which presumably detracts from day-to-day contact with MinRes activities.”

The ASA has recommended MinRes shareholders vote against the proposed pay packets of the company’s leaders, which will be tabled at the AGM, citing four concerns.

This includes a claim that there “is little transparency” with MinRes’ short-term bonus targets and that the company uses “retention incentives” for its executives.

“The ASA believes that base salaries should be set at a level necessary to provide an incentive for retention and that bonuses above base salary should only be awarded based on performance exceeding norms,” the group said.

Mr Ellison, who is MinRes’ largest shareholder, has already been financially penalised.

He will have to pay the company back $3.8 million for the tax dodge, $5m to charity over five years, and loses his $3.1m bonus for 2024. That bonus was originally set to be voted on by MinRes shareholders during Thursday’s AGM as a separate item to the remuneration report.

Mr Ellison also has to forfeit future short and long-term incentives worth up to $6.5m. He currently has a base salary of $1.6m.

The ASA — Australia’s largest not-for-profit group that represents retail shareholders — also recommended that MinRes shareholders vote against the remuneration report last year.