‘Massive shareholder loss’: Investors revolt over pay at Kyle and Jackie O’s former network

Investors have overwhelmingly rejected Kyle Sandilands and Jackie ‘O’ Henderson’s former boss’ $1.1 million pay packet, in a warning shot to the company’s board, who approved the compensation.

Shareholders in radio network ARN on Thursday vented their anger over the company’s 85 per cent share price dip over five years, with more than 90 per cent of proxy votes going against the company’s remuneration report, which included chief executive Michael Stephenson’s fixed $1.1 million pay.

There was also a sizeable protest vote against longstanding chair Hamish McLennan, who was ultimately re-elected as he pledged to invest $500,000 of his own money in response to a cratering share price.

The backlash came as McLennan vowed to keep fighting Sandilands’ and Henderson’s $170 million combined lawsuits. He was up for re-election at the company’s annual meeting in North Sydney, insisting that his investment was a show of confidence but denying it was a trade-off to secure investor support for another term on the board.

“I didn’t make any specific commitments. I have consulted shareholders, and they all want executives and board directors to have more shares in the company,” McLennan said, as 80 per cent of investors re-elected him to the position that pays $325,000 a year including super. “I like working,” he added, when asked if he could focus on several boards, having recently been appointed to weapons company DroneShield, while also chairing REA Group’s board.

Stephenson and McLennan were steadfast in rejecting any requests to speak about the multiple ongoing lawsuits against Henderson and Sandilands. Stephenson said “community and advertiser expectations have changed over time”, pointing to the lost $26 million in advertising revenue last year, a result of a boycott campaign and prolonged ratings slump which prefaced The Kyle and Jackie O Show’s last stand.

“There’s absolutely no question to that, and there were a number of advertisers that chose not to advertise with ARN because of some of the environments that we had and that their advertising would appear in. I’m very respectful of that,” Stephenson said, speaking to this masthead after the meeting.

In the lead-up to the meeting, McLennan faced investor calls to step down after handing Sandilands and Henderson their $200 million in combined contracts, and presiding over an 87 per cent decline in the valuation of ARN.

Influential proxy advisory firm CGI Glass Lewis had set the tone for the meeting, urging investors to vote against the company’s executive pay packets, and they followed through as the board faced fired-up shareholders and the media for the first time since sacking the show hosts two months ago.

The firm said Stephenson’s pay was too high, well above the median chief executive’s pay for ASX250-300 companies, while also considering ARN is not even close to being on that list.

“That’s a protest vote from our shareholders, and we take it seriously, and we’re respectful of it, and it’s something that we need to think about,” Stephenson said after the meeting.

The company has faced heavy media coverage – and duelling legal cases – after handing Sandilands and Henderson the most expensive talent deals in Australian media history and then tearing them up after little more than a year.

McLennan and the company came in for scrutiny during the meeting, in particular from veteran investor David Kingston, who asked McLennan a string of hostile questions, including a request to recount the “the three biggest mistakes you and the board have made that have contributed to the massive shareholder loss”.

McLennan called the question “loaded” and said the entire traditional media sector was under pressure. He declined to name any mistakes, but said the company regularly reflected on its performance and that he was committed to ARN.

“We’re not happy with where we’re at at the moment,” McLennan said. “I think hindsight is a wonderful thing when you look at a range of different decisions, but it’s a very, very fluid environment, and I think the board stands by all the decisions they make.”

Last month, one key shareholder told this masthead that McLennan should be held responsible for a number of poor strategic decisions, including the $307 million purchase of regional broadcaster Grant Broadcasters just five years ago.

But during the meeting McLennan defended the Grant acquisition, saying it was contributing to earnings. “It’s been a fantastic acquisition for us,” McLennan said, disregarding suggestions the money could have been better spent elsewhere. ARN itself is now worth a fraction of that acquisition price.

Kingston said he respected McLennan, but rebuked his performance. “If you can look everyone in the face and say that ARN is an enduring success when shareholder value has been decimated, I would be shocked,” Kingston said.

McLennan has faced some scrutiny over his relatively small shareholding in the company despite being its chair. He said his track record shows him having decent investments in the companies of which he is a director, though until now his shareholding in ARN has been marginal, just 73,000 shares as per the company’s recent annual report.

Two days ago, this masthead reported McLennan was selling his Sydney home for $36 million. He denied he was “picking the bottom” to invest his $500,000, with ARN’s share price languishing at just $0.26.

“I’m not picking the bottom, so to speak. I think that’s an unfair comment. I’m prepared to put serious money in because I believe in the long-term future of the company,” McLennan said.

Comments on the ongoing litigation against both Henderson and Sandilands were brief. McLennan stood by the company’s decision to tear up their contracts and said he was confident in their legal strategy. “I would like to assure shareholders that the board is committed to defending these claims and actively pursuing the cross-claims,” he said.

After the meeting, Stephenson said he held no personal grudge over Sandilands calling him a c--- during an on-air rant last year, despite the company quoting it directly in legal documents seen by this masthead while painting a picture of Sandilands’ character.

“I deal with a lot of things in a particular day. I’m sure that wasn’t a personal comment, yeah, I didn’t take it personally. I certainly haven’t thought about it much since,” he said.

The AGM is the first for Stephenson, who initially joined ARN as its chief operating officer in 2025. He was previously chief sales officer at Nine (the owner of this masthead) for a decade.

Looking ahead, Stephenson said he hopes there won’t be a similar vote next year after having the time to execute the business strategy he outlined to shareholders, which includes a larger focus on video content and continuing to take costs out of the business, with a target of $55 million in savings by 2027.

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