Jackson said the issuance of options to Bundey raised questions about his appointment as an “independent” chairman.
Bundey replaces United Kingdom-based James McClements, and faces a formidable task to repair the lithium and iron ore miner’s reputation. The Australian Securities and Investments Commission is probing the miner and the behaviour of its founder Chris Ellison, who has apologised for his involvement in an offshore tax rort and related-party transactions.
Shares in MinRes fell 9 per cent on Monday to $24.08 against the broader S&P/ASX 200, which was down 0.6 per cent.
The company’s stock last traded at $40 in October, and was as high as almost $80 in the past year.
A series of scandals has weighed on its shares and forced billionaire Ellison topledge that he would quitthe company by mid-2026. Ellison remains the company’s biggest shareholder, with an 11.5 per cent stake.
The miner said Bundey’s package of options was “heavily weighted toward an increase in shareholder value and aligned with shareholders’ interest … which is also reflective of the time commitment required”.
Paying non-executive directors with share price-focused awards also clashed with the guidelines of The Australian Council of Superannuation Investors, a key industry advisory body.
“Remuneration in shares is acceptable, but we do not support the payment of share options and other incentives which introduce leverage into non-executive remuneration,” the ACSI guidelines state.
‘Restoring trust’
Bundey is well aware of the size of the job he faces, as he acknowledged in a leaked memo to staff on Monday.
“There’s no doubt the past seven months have impacted value and trust in our company. My focus will be on creating shareholder value and restoring trust through board renewal, strong governance and a great company culture,” he said.
Investors have queried whether the miner’s efforts to improve its culture were superficial after all three members of its ethics and governance committee – a body established to oversee Ellison’s behaviour – quit last month.
Bundey is a private equity executive and deputy chair of Sydney-based building materials company Brickworks. He previously served as managing director and chief executive of the Pratt family’s packing group Pact for three-and-a-half years, but leftafter poor financial resultstriggered a share price collapse.
Rafael Lamm, chief investment officer at L1 Capital, which owns MinRes shares, said Bundey’s appointment was “an important step forward for the company and sets the pathway for a full reset to best practice corporate governance being implemented”.
“Mal has had an impressive career, both as a senior executive and director for high-quality organisations such as Rank Group and Brickworks. We believe that Mal’s skills, diverse experience and temperament position him well to successfully reset MinRes’ corporate governance.”
Bundey has been visiting the miner’s operations, including its $3 billion flagship Onslow Iron project in West Australia’s Pilbara region, to familiarise himself with the company.
“Mal was the standout candidate and unanimous choice of the board through our extensive international search,” said Zimi Meka, chair of the board nominations committee. “He’s a measured leader who strikes the right balance between strong corporate governance and savvy commercial outcomes.”
Bundey has extensive experience in the packing sector, including long stints at companies in the United States. He began his career in 1987 as a graduate at big four accounting firm Deloitte and left as a partner 16 years later.
Board replacements
The appointment of a new chair comes after last month’sabrupt exit of three non-executive directors– Denise McComish, Jacqueline McGill and Susan Corlett.
They comprised MinRes’ ethics and governance committee that was established to oversee Ellison’s conduct, and were privately the most critical of the blunt-speaking New Zealander.
In his memo to staff, Bundey said the company would “appoint new directors who bring the skills, diversity and fresh perspectives MinRes needs for our next phase of growth”.
“MinRes has made significant progress on governance. Our ethics and governance committee, which I will now lead, remains central to this work, and will continue with refreshed membership,” he said.
MinRes said Bundey’s appointment was agreed by the board on April 10 – shortly before the directors’ exodus. The miner has stonewalledinvestors’ questionsabout whether efforts to improve its culture have been superficial, and has never confirmed why the three directors quit.
The miner has lurched from one crisis to the next over the past seven months afterThe Australian Financial Reviewpublished a series of revelations about Ellison’s conduct and the board’s failure to curb its founder’s behaviour.
The board last November released a withering report into Ellison’s misdeeds, noting that the managing director’s conduct had stained the company’s reputation, and he had been less than honest with the board.
Skyrocketing debt
MinRes’ debt skyrocketed after it built its $3 billion Onslow Iron project. Repair costs ballooned on its iron ore haul road network after half a dozen jumbo road trains toppled over on its crumbling surface.
The minerruled out a highly dilutive equity raiseto shore up its wobbling balance sheet, which the market took positively. Still, the company’s $4.7 billion market capitalisation remains below its $5.8 billion in gross debt.
“We’ve got the assets plans and many quality options in place to grow our strong financial position,” Bundey said in his memo. “We can all be proud of our company’s proven track record for delivering value.”
Meanwhile, the lithium price has cratered from its 2023 peak, forcing MinRes to close some of its operations. There has been speculation by analysts that the group may look to raise cash by selling lithium assets.
More from the MinRes investigation
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