Christopher Adams

Christopher Adams is the Markets and Banking reporter for the New Zealand Herald

Rakon bosses suffer pay cut

Rakon directors will receive a 'substantially' smaller pay packet this financial year. Photo / Natalie Slade
Rakon directors will receive a 'substantially' smaller pay packet this financial year. Photo / Natalie Slade

Components maker Rakon says its managing director and marketing director will receive "substantially" smaller pay packets in the company's current financial year.

The Mt Wellington firm released its annual report on Friday, showing the total remuneration awarded to managing director Brent Robinson rose 6.7 per cent to $846,573 in the 12 months to March 31, while marketing manager Darren Robinson's pay packet rose 8 per cent to $691,800.

During that period the firm - which manufactures crystal oscillators used in telecommunications infrastructure, smartphones and GPS devices - posted a $400,000 net loss and its share price more than halved.

However, Rakon independent director Bruce Irvine said the Robinson brothers' pay packets for the 2012 financial year included performance incentive payments related to the previous financial year, in which the company posted an $8.5 million profit.

"This variable compensation was based on company and personal performance in that year and is not relevant to the recently completed March 2012 year," Irvine said.

He said senior executives who received performance incentives, such as the Robinson brothers, had that element of their pay "substantially reduced" in the year to March 2012 because of the poorer financial results.

"This will be reflected and reported in the 2013 annual report."

Rakon failed to meet earnings guidance when it reported its annual result last month, with earnings before interest, tax, depreciation and amortisation (ebitda), including a share from joint ventures and associates, falling 47 per cent on the previous year to $13.1 million, which the firm said reflected the impact of a strong New Zealand dollar.

The company gave guidance last year for ebitda in the range of $14 million to $18 million.

Announcing the full-year result, Brent Robinson said the company had "never felt better" about its overall position.

Global manufacturing volumes of smart wireless devices were expected to grow to 800 million in 2013 and he said Rakon was well positioned to take advantage of that growth and capture market share.

Rakon shares closed up 2c at 44c last night.

- NZ Herald

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