Nominet EGM ... results in

[bb99]

Looking at the figures I'd guess that one of the big 3 did vote yes.

Hazel

They voted yes to the changes proposed, not to changing to one member one vote (which was what we were referring to above). That's an entirely different kettle of fish

 

[Beasty]

Or even rafter of turkeys!

 

[texidriver]

That's an entirely different knob of Wigeon !

 

[Beasty]

:lol: :lol: :lol:

 

[Jay Daley]

Some info:

1. The voting structure was designed this way to stop capture by a group of people without real investment in Nominet, i.e. carpetbaggers. This turned out to be very important some years ago when an attempt was made to carpetbag, but the weighted vote outweighed all those people who had joined for that purpose.

2. The voting is calculated as one quarter on a one member, one vote basis, and three quarters on weighted votes. Those weighted votes are in proportion to the number of paid for domains a member has on the register. This is then capped at 10%. So the big people have around 10% each of the 4.7 million names on our register.

3. Some of the maths on this thread has been wrong. If both the big people had voted yes then resolution one would still have required 862 more yes votes to have reached the 90% threshold. (Note: approx 4,900 votes were cast from a total pool of approx 10,000 votes).

 

[sneezycheese]

Some of the maths on this thread has been wrong. If both the big people had voted yes then resolution one would still have required 862 more yes votes to have reached the 90% threshold. (Note: approx 4,900 votes were cast from a total pool of approx 10,000 votes).

So lets get this right, based on the figures you've given us 49% of the total available votes voted (4,900 votes) relates to only 11% of the total numbers of members who voted (as quoted by Lesley Cowley)!

So had the other 'two big players' (Pipex and Fasthosts) voted for the motion, we would of had a figure of around 81.38% of the total number of votes available voting for the motion (based on your quoted figure of 862 to get to the 90% threshold), but again, still only 11% of the total numbers of members voting.

I thought both Pipex and Fasthost voted 'against' the motion. see... http://www.theregister.co.uk/2006/03/16/nominet_egm_vote/

Also I thought each members total voting rights was capped at 10% of the total votes available {(81.38-49)/2=16.19} :???: figures based on additional votes, rather than transfered votes.

Me thinks someone's got their figures wrong...

Not very good is it?

 

[Jay Daley]

So lets get this right, based on the figures you've given us 49% of the total available votes voted (4,900 votes) relates to only 11% of the total numbers of members who voted (as quoted by Lesley Cowley)!

Yes it is 49%. I haven't seen the figures for the number of people but this sounds about right.

So had the other 'two big players' (Pipex and Fasthosts) voted for the motion, we would of had a figure of around 81.38% of the total number of votes available voting for the motion (based on your quoted figure of 862 to get to the 90% threshold), but again, still only 11% of the total numbers of members voting.

I thought both Pipex and Fasthost voted 'against' the motion. see... http://www.theregister.co.uk/2006/03/16/nominet_egm_vote/

No you've misunderstood, they did vote against. I was explaining what would have happened if they had actually voted in favour. That doesn't change the total number of votes cast.

Also I thought each members total voting rights was capped at 10% of the total votes available {(81.38-49)/2=16.19} :???: figures based on additional votes, rather than transfered votes.

Yes, the total pool of votes is 10430ish so the cap is to limit votes at 1043.

Me thinks someone's got their figures wrong...

Not very good is it?

Good job I'm here to explain it then.

 

[retired_member11]

...but is it your job to explain this labyrinthine voting structure?

Perhaps the top brass ought to come on and give their thoughts on this and their vision of the future.

 

[Whois-Search]

Good job I'm here to explain it then.

Well it is a bit complicated, even some of the PAB don't understand it on Nom-Steer !

 

[Beasty]

Well done Jay for being the first Nominet person to stick their head up above the trenches on here since the EGM to try to explain the situation from your point of view.

I understand the sense of trying to prevent “carpet bagging” where a valuable asset (that is not subject to any competition) is held by a private company. When there were relatively few Nominet members then the short term solution devised made sense - now that there are 3,000 odd then the problem is substantially reduced - since to set up sufficient connected members at £500 a pop would not make sense.

The problem though has swung the other way - so that the Big 3 control somewhere over 30% of the total Nominet votes (Pipex has a few additional votes from subsids I gather to take it over 10%). Even if all other members voted - these three would have negative control and could block any special resolutions - and each on their own could block anything needing the 90% approval.

However when so few members vote - their control swings towards being positive control - having more than 60% of the votes cast at the EGM between them. With a few more big members they could easily get a 75% positive control - and with the help of the board doubtless 90%.

So the problem is that Nominet - IF it should remain a private entity - must revert to a more typical structure for a company limited by guarantee with a large number of members - such as the rugby football unions - where one member one vote is an effective brake on any attempt to give one person (or a few people) control.

However, as has been said before, that would require the Big 3 to agree to relinquish the position of power they now hold - and as businesses there is no reason why they should just give up something of value.

It is an entirely unacceptable situation for the .uk registry - which is a national asset - to be in. It is an unavoidable problem inherent in leaving it in the hands of a private company.

 

[Jay Daley]

...but is it your job to explain this labyrinthine voting structure?

Yes.

Perhaps the top brass ...

Ahem, ahem (points to sig below).

... ought to come on and give their thoughts on this and their vision of the future.

I guess you mean one of the elected non-executive directors. You could always ask.

 

[Jay Daley]

Well done Jay for being the first Nominet person to stick their head up above the trenches on here since the EGM to try to explain the situation from your point of view.

Thanks.

I understand the sense of trying to prevent “carpet bagging” where a valuable asset (that is not subject to any competition) is held by a private company. When there were relatively few Nominet members then the short term solution devised made sense - now that there are 3,000 odd then the problem is substantially reduced - since to set up sufficient connected members at £500 a pop would not make sense.

Carpetbagging doesn't tend to need great organisation. There are plenty of people who will willingly put up the money if they can smell a dividend. All you need do is get enough publicity and they will join.

The problem though has swung the other way - so that the Big 3 control somewhere over 30% of the total Nominet votes (Pipex has a few additional votes from subsids I gather to take it over 10%). Even if all other members voted - these three would have negative control and could block any special resolutions - and each on their own could block anything needing the 90% approval.

I should point out that the multiple memberships are in the process of being merged (the result of various takeovers) and are capped in the actual voting under the connected members rule.

However on the substantive point you are quite right. But one of the top three did vote yes and from discussions with one other they are not against changing the voting structure to reduce their control. I think their reasons for voting no were much the same as the rest of the no campaign and involved lots of different factors.

One other point, which you may not know, is that the board can actually change the voting structure without a vote in favour. I'm not an expert on the legal side by any means so I can't precisely explain why, but it is something to do with it not being in the M&A.

 

[retired_member11]

Yes.



Ahem, ahem (points to sig below).



I guess you mean one of the elected non-executive directors. You could always ask.

I was thinking about the top brass. CEO top. Thanks.

 

[Beasty]

Carpetbagging doesn't tend to need great organisation. There are plenty of people who will willingly put up the money if they can smell a dividend. All you need do is get enough publicity and they will join.

And by the same token if the Big 3 and a few mates can smell a dividend...

Whichever way you look at it the problem is inherent if you retain a corporate (or even a mutual) structure. There is an asset which (rightly or wrongly) is not subject to competition and guarantees the owner a tidy profit. A company can be controlled or owned by a third party or parties - and as you say it will happen if they can "smell a dividend".

 

[Jay Daley]

And by the same token if the Big 3 and a few mates can smell a dividend...

Possibly, but I think it much more likely (and this is supported by discussions with them) that they support Nominet in principle and their priority is for us to be a stable and secure supplier.

 

[Beasty]

I was thinking about the top brass. CEO top. Thanks.

With Nominet it's the Chairman - who is on over a quarter of a million. Mind you the CEO on £150K might do!

BTW - someone was asking about a week ago whether these guys salaries were in proportion to industry standard. In the paper yesterday they reported that the directors of FTSE350 companies took home an average of 1.2% of the companies' profits. Nominet's top two took home between them over 40% of the £1 million retained profit in the latest set of figures...so getting on for 40 times the % quoted as average.

 

[Beasty]

Possibly, but I think it much more likely (and this is supported by discussions with them) that they support Nominet in principle and their priority is for us to be a stable and secure supplier.

A suppier who will give them "discounts" (i.e. dividends by another name) based on the number of registrations that they bring in? As companies themselves - they have a duty to their shareholders to make the most that they can from any asset - they have no duty to the wider world.

However it is looked at, Nominet is a company that is effectively controlled by a few members. Is that acceptable? I say that it is not. How can it be resolved? Stop Nominet being a company.

 

[Jay Daley]

With Nominet it's the Chairman - who is on over a quarter of a million. Mind you the CEO on £150K might do!

These figures are taken from the last annual report, which was for the financial year 2003-2004 (we have yet to publish the report for 2004-2005) and we have had a change in chairman since then.

 

[retired_member11]

With Nominet it's the Chairman - who is on over a quarter of a million. Mind you the CEO on £150K might do!

BTW - someone was asking about a week ago whether these guys salaries were in proportion to industry standard. In the paper yesterday they reported that the directors of FTSE350 companies took home an average of 1.2% of the companies' profits. Nominet's top two took home between them over 40% of the £1 million retained profit in the latest set of figures...so getting on for 40 times the % quoted as average.

I read in The Times that the Chairman has several other well paid corporate positions on UK PLC boards. Perhaps someone might cross reference to see where the business influence on Nominet's future is coming from (?).

 

[Jay Daley]

A suppier who will give them "discounts" (i.e. dividends by another name) based on the number of registrations that they bring in? As companies themselves - they have a duty to their shareholders to make the most that they can from any asset - they have no duty to the wider world.

I'm not sure where you get that from? We don't do bulk discounts nor have we ever done. Unfortunately some of the wording in the proposed governance changes gave the impression that we might, but that was not the intention.

However it is looked at, Nominet is a company that is effectively controlled by a few members. Is that acceptable? I say that it is not. How can it be resolved? Stop Nominet being a company.

I agree it has the potential to become that with our voting structure and that is a real concern. However, currently it isn't controlled in this way as is evidenced by the elected non-execs. One of the represents a big member, but the other three are entirely independent and not controlled by member interests.

I think we should wait to see if this turns out to be the case before worrying unduly.