After 're-recruiting' the company's managing director five months before his planned retirement, Elders chairman, Ian Wilton, expects Mark Allison will likely stay as the farm services firm's boss for another two years, or more.
"This is not a temporary, band-aid measure," Mr Wilton said.
He confirmed he began pondering about asking Mr Allison to reconsider his exit plans about four weeks ago as the final selection process to find a successor started to broaden and investor concerns about Elders earnings prospects in the coming year continued weighing on the business.
At least one of "several good candidates" withdrew late in the recruitment process, while others "weren't quite ready", which eventually prompted the chairman to ask Mr Allison two weeks ago if he would consider extending his nine-year tenure.
"It's not the easiest job. It spans a big country, it requires a lot of travel and industry experience, and being available almost 24 hours a day," Mr Wilton said.
"However, Mark's been very much involved in reviving Elders' performance for the past decade and I know he wanted to see that momentum continue.
"Now he's decided to stay, I'm sure he will make a commitment to stay for the longer term - that could easily be two years."
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Mr Allison has been retained on a renegotiated chief executive officer's salary which lifts his annual fixed pay from about $1.1 million to $1.5m, plus a bonus of $1m if he stays beyond June 2025.
He will also be entitled to 90,000 shares for each of the next two years he remains in the job.
Elders' pressured share price responded positively to the news, for a while, jumping from $6.30 to $6.85, but later settled back into $6.30 territory.
Mr Wilton did not reveal if the shortlist of outsiders considered for the job involved executives from rival local agribusinesses or overseas, but industry speculation put Ridley Corporation boss, Quinton Hildebrand, as a likely contender.
However, last week the stockfeed business made it clear Mr Hildebrand was staying put, announcing it would pay him a bonus $1m cash payment on July 1, plus 1.5m performance rights and a short term bonus incentive of up to 150pc of his fixed remuneration after extending his notice period to 12 months.
Hard to act to follow
Mr Wilton, who has been Elders' chairman since 2019 and a director since Mr Allison became managing director in 2014, said ideally he favoured appointing somebody from within Elders' ranks as the next managing director.
The business had many characteristics and relationship expectations which were not readily adaptable from experience gained in other sectors in Australia or overseas.
He said farm services companies everywhere were constantly seeking specialists to fill people-focused advisory and service roles, noting the current stiff competition for good agronomists and technical staff often resulted in bidding wars.
He did not accept that the board's hand was forced by negative talk about potentially tougher seasonal conditions or the disappointing share market reaction to Mr Allison's initial departure plans.
"I think the whole share price reaction has been overcooked," Mr Wilton said.
"And anybody in agribusiness knows there will be years during the cycle when things are more subdued and good seasons when you can do very well."
However, directors were also aware that if they had not had somebody ready to take the top job soon, it may have taken a further six or seven months to get a superior candidate settled into the role.
The board was sensitive about dragging out the process, and Mr Allison also recognised a replacement had not been found as easily as first anticipated.
"His knowledge of the company and the industry is deep and invaluable, and not easy to find elsewhere," Mr Wilton said.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
