Vicinity Centers CEO Grant Kelley departed after sexual harassment warning

The 360 ​​review focused on Vicinity’s three top executives and concluded there was significant dysfunction and discord arising from some of Mr. Kelley’s behaviors.

The Financial Review understands initial discussions about Mr. Kelley’s ultimate retirement from Vicinity had begun much earlier this year, as part of broader discussions about succession at the company and Mr. Kelley’s plans for the next phase of his career.

The subsequent October 31 announcement about Mr. Kelley’s anticipated retirement by midway through next year was issued after the sexual harassment investigation had begun but before it had concluded.

Both adverse reports were received soon after that announcement, triggering discussions between Mr. Kelley and his board on how quickly he would leave.

On November 15, just a day before the annual shareholder meeting, it was announced that Mr. Kelley would step down the next day, after the meeting.

The board of the $8.7 billion ASX-listed company did not terminate Mr. Kelley’s employment. Instead, Mr. Kelley’s accelerated departure was arranged by mutual consent.

‘Why am I putting up with behavior like this?’

The sexual harassment complaint lodged by former chief corporate affairs officer Marie Festa – who has agreed to be identified in this story – was formally lodged about two months ago. The board responded immediately with its appointment of an external workforce investigator.

“I just thought to myself ‘Why am I putting up with behavior like this? Why would I do that, why should anyone do that?’” Ms Festa told the Financial Review.

“I wasn’t necessarily traumatized, I was infuriated. I decided I just had to resign. But then a very wise woman said to me: ‘Marie, if someone like you, with a 20-year-plus career, working at an executive level doesn’t speak up then how can we expect others to take that risk and feel safe to do the same?’”

The report upheld multiple allegations Ms. Festa had made about a series of unwelcome remarks from Mr. Kelley about her attractiveness and bragging about his sexual exploits, dating back more than a year.

It found that around October last year, Vicinity’s chief executive told Ms Festa words to the effect: “We are similar. We are both attractive people. And we have had to deal with that our whole lives.”

In July this year, Mr. Kelley said to Ms. Festa words to the following effect: “I was at lunch with [a leading corporate figure]. You and her have similar issues. You are both attractive women and have had to deal with that throughout your careers.”

The third incident occurred on the same day and was prompted by a request for him to be profiled by the Financial Review’s BOSS section. During a discussion on whether to proceed with the profile, Mr. Kelley said words to the effect: “If I was 20 years younger and single, I’d do it. When I was on the cover of Forbes magazine Asia, I got a lot of action.”

False rumours, nickname

The sexual harassment investigation also found that Mr. Kelley falsely accused Ms. Festa of having a relationship with another executive, and over the first half of this year spread that false rumor to her colleagues.

The investigator further found that Mr Kelley gave Ms Festa a nickname regarding her appearance during an executive team meeting, and continued to call her by that name in subsequent meetings.

“This kind of sexual harassment can make you question whether you’re actually being valued because you’re good at what you do or whether it’s because they have other ideas about you,” said Ms Festa, who resigned this month.

“I just want to be valued on the merits of my work, it should have nothing to do with the way I look.”

Vicinity is expected to brief its 1200 staff on the full circumstances of Mr. Kelley’s departure this week as the company’s board and management look to repair the company’s culture.

Vicinity Centers owns the Chadstone shopping mall in Melbourne. Getty

“Vicinity prides itself on being a safe and inclusive place of work for all its team members. We take allegations of misconduct very seriously and follow a strict protocol to address concerns as and when they are raised,” a spokeswoman told the Financial Review.

“In this instance, an independent external investigation was conducted which found four allegations to be proven and Vicinity took advice on the appropriate sanctions against Mr. Kelley.

“In addition, both the proven allegations, together with the subsequent findings of an internal 360-degree review, prompted Vicinity’s board and Mr. Kelley to agree that Mr. Kelley’s retirement be brought forward.”

In a statement on Tuesday, Mr. Kelley confirmed that he had been the subject of allegations and that he had co-operated fully with the investigation. But the former chief executive later released a subsequent statement rejecting a key assertion by Vicinity.

“From the outset I denied the allegations of misconduct made against me by a former employee of Vicinity and I maintain those denials,” he said.

Former Vicinity Centers chief corporate affairs officer Marie Festa.

“I have never been given the opportunity of reading the report of the investigator who investigated the allegations. I still have no idea of ​​the investigator’s process or objective.

“The suggestion by Vicinity that I agreed to bring forward my retirement in light of the investigation is false.

“The company had a right to accelerate my retirement and it chose to exercise that right after the board received the results of an internal review, which had nothing to do with the allegations or the findings of the investigator.

“The findings, which I reject, resulted in a warning, nothing more. I was not terminated, there was no basis to terminate me and the implication that I acknowledged wrong-doing by “agreeing” to bring forward my retirement is demonstrably untrue.”

Vicinity’s national portfolio includes the country’s biggest shopping center, Chadstone in Melbourne’s south-east, which it owns jointly with Rich Lister John Gandel, who is also Vicinity’s largest shareholder.

Basketball owner, Adelaide establishment

A corporate high-flyer, Mr Kelley was recruited by Vicinity in 2017 after a successful career abroad. He started work in early 2018 and was at the helm to steer the company through the upheavals in the sector brought on by the pandemic.

Mr Kelley, 58, is an Adelaide establishment figure with considerable interests in South Australia, including the Adelaide 36ers basketball team, which he owns.

As a result of his early departure, Mr. Kelley forfeits $2.025 million in long-term incentives as well as any short-term incentives he may have received after the 2023 financial year.

With Mr. Kelley’s exit, Vicinity moved quickly to appoint its chief operating officer, Peter Huddle, a highly regarded retail veteran, as acting chief executive as it completes an executive search to fill the top post. Having held senior roles during a long career at Westfield, Mr Huddle has confirmed as favorite to lead the company permanently.

Meanwhile, Mr. Kelley is moving on to his next venture, with plans to establish a private equity platform, backed by wealthy players that will invest in neighborhood and sub-regional shopping centers.

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