Home World Business Primary Health Care chairman Rob Ferguson hands new CEO Malcolm Parmenter an...

Primary Health Care chairman Rob Ferguson hands new CEO Malcolm Parmenter an exit plan

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Primary Health Care chairman Rob Ferguson clearly did not have a Plan B in place for the untimely departure of his CEO, Peter Gregg, who has been charged with two counts of falsifying records while an executive at Leighton Holdings. 

But the man he chose on Tuesday to replace Gregg, Sonic Healthcare executive Malcolm Parmenter, is not making the same mistake. Not with a sleeping giant on its register, China’s Jangho, which makes it difficult for Primary to shake off speculation that a $2 billion takeover bid might lob at any moment. 

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Sydney airport announcement

The Federal government will announce in the budget how much it’ll allocate to building the airport in Badgerys Creek after Sydney Airport Group chose not to build and operate it.

Parmenter has got himself a salary of $1.65 million – more than Gregg earned last year – short-term incentives worth $962,000, and the same in long-term incentives over three years. 

Things get interesting if someone decides to make a takeover bid for Primary and succeeds.

Rob Ferguson, Primary's chairman, faced criticism over his handling of the CEO's departure. Rob Ferguson, Primary’s chairman, faced criticism over his handling of the CEO’s departure. Photo: Jessica Hromas

If a “change of control” occurs before Primary’s annual shareholder meeting in November, Parmenter receives a cash payment equalling his long-term incentive award of $962,000. 

If a “change of control” occurs after the meeting, but before Parmenter has served 12 months – he starts on September 6 – the long-term incentive payment will “vest in full”. How this differs from the payment he will receive if a change in control occurs before the meeting is beyond the mental faculties of your columnist. 

Gregg, who has already made his first court appearance in relation to the charges, will continue in his role until Parmenter starts in September.  

Gregg is not expected to have any role once Parmenter joins, but he will receive the rest of his $1.537 million annual base pay as he serves out notice until January.

Malcolm Parmenter, who will replace Peter Gregg (pictured) as Primary Health Care's CEO, is making sure he has a Plan B. Malcolm Parmenter, who will replace Peter Gregg (pictured) as Primary Health Care’s CEO, is making sure he has a Plan B.  Photo: Jessica Hromas

Up the creek  

There were no surprises in the announcement that Sydney Airport would decline the option to build the city’s second airport out in the west. 

“Is it going to be the airport that goes nowhere?” said its former chairman Max Moore-Wilton about the ongoing saga. 

Illustration: John Shakespeare. Illustration: John Shakespeare. 

Sydney Airport’s departing chief, Kerri Mather, said its decision not to accept the Western Sydney Airport development “on the terms provided is in the best interests of our investors”.

No wonder Mather is leaving. It must be tough finding investments that stack up against Sydney Airport’s car parking monopoly, which delivered a profit of $98 million with a margin of 73 per cent.

Count down 

Network Ten shares have hit record low, after record low, after last week’s half-year result but it might still have surprised a few people that the entire business is not worth much more than James Packer‘s pre-nup deal with former wife Erica. 

Don’t let the 23¢ share price fool you, Ten did a 10:1 share consolidation early last year. Without that, the stock would now be trading as a penny dreadful at 2.3¢.

It is a long way from October 2010 when a buccaneering Packer swooped on an 18 per cent stake, buying 186 million shares at $1.50.

That’s a cool $244 million. Yes, that hurts even taking into account that he handballed half this stake to Lachlan Murdoch within weeks.

Gina Rinehart then waded in, paying about $157 million for her stake.   

That’s $400 million of shares that have a current market value of less than $10 million. And this does not include the significant top-ups that followed, like the highly dilutive December 2012 rights issue.  

And CBD could not even begin to calculate how much money has been torched by the other billionaire at the table, Bruce Gordon.

To be fair, though, even some analysts – who should have known better – could not pick Ten’s incredible decline even two years ago. 

The media team at Morgan Stanley finally gave up on their glass-half-full view of Ten Network after its latest result and issued an embarrassing mea culpa. 

“We have been Underweight 4 of the 5 TV shares in our Australia coverage universe for the past two years … Ten was our only positive view, but we were wrong … with the benefit of hindsight we should have been bearish on it too.” 

CBD has been responsible for far too many embarrassing prognostications over the years to mention the names of the analysts in question. 

Follow CBD on Twitter. Got a tip? ckruger@fairfaxmedia.com.au

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