Singapore Post expects to name a new chief executive at the end of the year, but the postal group was looking to a CEO with a "different profile" from that of Dr Wolfgang Baier - who quit last December - in its next phase of growth anyway, chairman Simon Israel said yesterday.
SingPost's annual general meeting at Suntec City Convention and Exhibition Centre dragged into a three-hour affair as Mr Israel took pains to clear the air over the firm's very public board governance crisis.
"While in an ideal world, we should like to have the same CEO finish up executing the strategy, the board is of the view that the task ahead of us is integration, which will require a different profile of CEO than Dr Baier," Mr Israel said in response to a shareholder's question.
As for the chief operating officer role, which Mr Sascha Hower vacated last month, Mr Israel noted that SingPost has "a very strong internal candidate who will slip into that role". Mr Israel also took the initiative to address the burning issue among some shareholders of whether SingPost had overpaid for some acquisitions. His conclusion: it is too soon to tell.
"We have owned Trade Global for just eight months and Jagged Peak, four months. It is premature to take stock and reach conclusions on their progress at this early stage," he said in a speech.
"We are slightly behind the business case on Couriers Please, since acquiring it in Dec 2014."
And while SingPost has enjoyed a historical return on equity of 17 to 21 per cent, thanks to fatter margins in the mail business, Mr Israel warned that this return would fall over time as the logistics and e-commerce segments grow.
Urging shareholders to have "realistic expectations for the next few years", Mr Israel said that SingPost's dividend policy of seven cents a share per year will need to be reviewed "to ensure there is a clear link to underlying earnings".
Activist investor Mano Sabnani expressed concern that SingPost's recurring profit last year was not even sufficient to cover the dividends.
"The chairman has put us on notice, but I think it's staring us in the face," he said, arguing that returns were even lower than what was painted in the annual report, with a less than 4 per cent return on assets in the logistics, retail and e-commerce segments combined.
Mr Israel said: "If the board forms a view that over time, the dividend is not sustainable, it needs to be addressed."
Many investors flagged the whopping $493.5 million of goodwill on SingPost's books. Shareholder David Chan said: "If you ever want to buy things with a lot of goodwill, please call an EGM (extraordinary general meeting) first, ok?"
One shareholder simply stood up to thank Mr Israel for coming in as a "white knight" to " rescue the ship".
One unexpected gripe was the placement of the chairman and CEO's photos in the annual report. When Dr Baier joined in 2011, his picture was next to chairman Lim Ho Kee's, a shareholder noted. "But as the years went by, his picture got further and further away from the chairman. Next year, I hope to see the chairman and CEO posing side by side," he added.
Pricewaterhouse Coopers was re-appointed as SingPost's auditor for this year, though a request for proposal will be called starting from next year, Mr Israel said.