Ohanessian had been in his post for five and a half years when his contract was terminated in a shock board decision in February 2017.
He returned to the company in May after a public showdown with the board that sacked him.
Different views
The man at the heart of his dismissal was Praemium chairman Greg Camm, who had only joined the company the previous November.
Ohanessian fought back, which lead to Camm labelling him “aggressive” and “unwilling to make necessary changes in his behaviour” in his letter to all shareholders ahead of a general meeting to decide Camm’s fate and that of the board.
“It’s fair to say, clearly by looking at the timing, there was pretty quickly a difference of opinion between the chairman and myself. I don’t think there’s any secret about that,” Ohanessian told IA.
“I would equally say that we clearly had a different view on not only the direction of the company but about the way the company should be run.”
CEO lifecycle
Putting aside personal difference, Ohanessian said that the decision to remove the chief executive and disrupt a high performing management team at a time when a company is doing well is what sparked the fightback.
“That really was, at the end of the day, what mattered the most,” he said.
“The CEO lifecycle is such that, when you make the decision that it’s time to change, you know you are going to lose six to 12 months by the time a new CEO is found, comes up to speed and tries to put their own spin on the business.
“I really believe, because of the work we had done, that we were on the precipice of creating a great company and nobody wants to see that interrupted prematurely and for no good reason.
“That’s what some of the shareholders reacted to and started what became a pretty brutal and tough process.”
Shareholder activism
Up until a few years ago, Praemium was very much a retail investor-held business, Ohanessian explained. This changed and institutional investment in the company was around 40% at the start of the year.
It was institutional support that helped Ohanessian challenge the Praemium board and request a general meeting be held to remove Camm and the board.
“Shareholder activism is really unusual in Australia. For the institutions to decide to get involved was a big step for them. I think it reflects the strength of feeling from the institutional shareholders who invested in good faith in the business.”
For institutions, stability is very important, he added.
“They understand that momentum in a small company is a very fragile thing. From the outside, growth looks easy but it is never easy for any business. And when you’re a small company you can never take it for granted.
“So, interrupting that kind of momentum is something that our shareholders felt very strongly about.”
Institutional shareholders now hold closer to 50% of Praemium.
Doubt
Ohanessian admits to having had one day of uncertainty about his future with Praemium but it was before he was sacked.
“I had my doubts back in January, based on what had been outlined to me by the board about whether I could be effective. So, I did actually consider my position – but it was only a day.
“On the second day of having considered what I should do next, I was reminded of our staff, our clients and our shareholders and I thought that this was worth fighting for.
“When the events of February happened, I decided that the right thing for me to do was to try and protect this company and preserve what we had built. That’s why I’m very glad to be back, because as far as I’m concerned, myself and the management team and staff, we’re all back to doing what we were doing before.
“That is what this has been all about. Restoring what we were doing and getting on with it.”
Clean sweep
Ohanessian’s triumph and the removal of Camm and the three directors gave Praemium the rare opportunity to completely refresh its board.
“I think that’s the silver lining,” Ohanessian said. “Boards tend to be kind of an evolutionary thing – you don’t often get an opportunity to get a complete reset.”
He also revealed that the new board, including the chairman, were chosen by the institutional shareholders.
“We only have two substantial shareholders – Paradise and Australian Ethical – and they were front and centre in not only choosing a good, strong, independent chairman, but also the board.”
Ohanessian believes, having worked with the old board, that “the new board is going to be much more supportive”.
“If a management team is doing well, I think the default position of the board should be support. By all means, question, challenge, probe; but, if things are going well, the first questions should be ‘how can we help?’”
Moving on
Following on from the eventful first half of the year, Praemium is eager to get back on track and pick up some of the strategic objectives that were put on hold.
“The team kept to task throughout; but, when you have this kind of disruption, the more strategic agenda items tend to wane. So really, it’s more about re-tooling on the more strategic stuff that got held up from back in December, from when the new chairman came on board.
“In terms of sales and growth, that continues on as always. We made it very clear that we’re committed to the pensions market in this part of the world – we made a small acquisition in the UK last year, Wensley MacKay.
“Suffice it to say, we’d like to be a bit more actively involved in that pensions space. We’re looking to release a lot of very exciting new products, technology interfaces, most of which progressed very well in my absence,” Ohanessian said.
