SYDNEY: The Australian Shareholders Association (ASA) is the latest to call into question David Jones' handling of the Mark McInnes harassment claims.
Four days after David Jones mailed a letter to shareholders addressing the circumstances surrounding the departure of its former CEO, ASA chairperson Helen Dent labelled the David Jones board's decision to grant McInnes a $1.5 million settlement payment “totally unnecessary”.
“Shareholders have already paid a considerable price in the devaluation of their investment, the damage to the brand and inevitable compensation of the victim,” Dent said.
“To ask them to pay one cent more than legally necessary to Mr McInnes is to add insult to injury.”
In correspondence between David Jones chairman Robert Savage and Dent which has since been published on the ASA website, Savage defended the settlement payment.
“Making the $1.5 million payment (which constitutes 80 per cent of Mr McInnes' base salary) enabled the Board to secure a more relevant and rigorous non-compete undertaking from Mr McInnes,” Savage wrote.
“This was considered necessary to protect the company, the business and ultimately, shareholders' investment.”
Yet Dent rejected Savage's explanation, arguing a non-compete clause in McInnes' contract already restricted the former CEO from working for an Australian department store or e-commerce site in the six months following his termination notice.
“In circumstances where it is highly questionable whether any competitor would be willing to employ Mr McInnes in the foreseeable future, surely the Board must have had some other reason for throwing such a sum at the problem. Shareholders are entitled to know what that reason is,” Dent said.
The ASA called for further feedback from the David Jones board.
The department store announced on June 18 it had reached a “mutual termination” agreement with McInnes in the wake of revelations the former CEO had behaved in “a manner unbecoming of a chief executive to a female staff member” .
Upon the termination David Jones announced it would pay McInnes his statutory entitlements of $445,421 in addition to a $1.5 million settlement. The company said McInnes' settlement was less than his contractual entitlements.