Tabcorp Former Head Kupper Replaces Elstone as CEO of ASX ABC Recruitment

Tabcorp Former Head Kupper Replaces Elstone as CEO of ASX

Aug 26, 2011 Career News

ASX Ltd. named Elmer Funke Kupper, the former head of Australia’s biggest gambling company, as its chief executive officer, ending the tenure of Robert Elstone five months after his attempt to merge with Singapore Exchange Ltd. was blocked amid a nationalist uproar.

Funke Kupper, the 46-year-old former chief executive of Tabcorp Holdings Ltd., will start his new job on Oct. 6, ASX, operator of Australia’s major stock exchange, said today. Elstone didn’t seek to extend his contract when it expired in July.

Funke Kupper, a former banker, became CEO of Tabcorp in July 2007 and oversaw the spin-off of its casinos into Echo Entertainment Group Ltd. in June this year. He joins ASX following its failure earlier this year to merge with Singapore Exchange and at a time when it faces competition from a new rival, Nomura Holdings Inc.-owned Chi-X Australia Pty.

“It can be a little perplexing when boards favor people without deep industry expertise to run fairly complex businesses,” said Prasad Patkar, who helps manage the equivalent of $1.7 billion at Sydney-based Platypus Asset Management Ltd. “Some might well wonder what’s wrong with bankers running banks and experts in securities trading running stock exchanges.”

Share Performance

Tabcorp shares fell 39 percent from June 30, 2007, to June 30 this year on a total return basis, which includes dividends, according to data compiled by Bloomberg. That compares with a 13 percent drop for Australia’s benchmark stock index.

On the same basis, ASX shares have risen almost 20 percent over the five years since Elstone took over in 2006 compared with about an 8 percent gain for the S&P/ASX 200 Index.

Funke Kupper “shone” in the search for Elstone’s replacement, ASX Chairman David Gonski told reporters in Sydney today.

Elstone, 58, has been managing director and CEO of ASX since July 2006, when the bourse completed its acquisition of SFE Corp., Australia’s biggest futures exchange, where Elstone held the same positions. ASX last week posted a 13 percent increase in second-half profit as trading volume rose amid global economic uncertainty.

“Robert has been an outstanding steward of ASX,” Gonski said in today’s statement.

Annual Salary

Funke Kupper was formally appointed Tabcorp’s CEO in July 2007, four months after taking on the role on an interim basis after the company fired Chief Executive Officer Matthew Slatter three weeks after reporting a slump in profits. Prior to that, Funke Kupper ran Australia & New Zealand Banking Group Ltd.’s Asia Pacific business and oversaw its personal banking and wealth management unit.

Funke Kupper will be paid a fixed annual salary package of A$1.75 million ($1.8 million) plus a bonus of as much as A$1.5 million, ASX said in today’s statement. Elstone was paid $1.5 million in fixed salary plus bonuses, according to the company’s latest annual report.

“Funke Kupper’s background is broadly suitable for the role,” said Angus Gluskie, who manages more than $300 million at White Funds Management in Sydney. “His work with Tabcorp gave him solid experience in a heavily-regulated environment and in strategic transactions. Running the ASX in an increasingly competitive environment is a different kind of challenge, and investors may feel uncertain as to his ability to address this.”

ASX shares rose 0.4 percent to A$29.40 as of 1:53 p.m. in Sydney today.

Failed Merger

A priority will be to maintain ASX’s performance through fast-paced change in the industry,” Funke Kupper said today, adding that he has the experience to “navigate” ASX through the evolving regulatory and competitive landscape.

Singapore Exchange, led by Chief Executive Officer Magnus Bocker, offered to buy ASX on Oct. 25 in a cash-and-share deal then valued at A$8.4 billion.

Australian Treasurer Wayne Swan blocked Singapore Exchange’s bid for the operator of the Sydney-based bourse on April 8, saying the deal was not in the nation’s interest and would have left Australia as a junior partner.

The sale ran into vocal opposition from Canberra lawmakers whom Prime Minister Julia Gillard’s minority government needed to pass legislation allowing the deal to be approved by parliament.

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