Nuplex Industries is seeking to increase its non-executive directors' fee pool by 28 per cent, as it plans to shut plants and lay off factory workers on both sides of the Tasman.
The NZX-listed specialty chemicals maker backed down on a plan to expand the fee pool last year after opposition from investors.
Its latest attempt to increase the funds available, which shareholders will vote on at the annual meeting in Auckland next Thursday, has prompted disgruntled investors to contact the Business Herald this week.
Nuplex wants to increase the pool from NZ$1 million to A$1 million a year, which represents an increase of around NZ$282,000, or 28 per cent, the Sydney-based firm said in the notice of its annual meeting.
First Union general secretary Robert Reid said the union was shocked that the company was proposing the increase when its workers were facing redundancies. "Hopefully shareholders will be as appalled as us and vote down the increases to the directors' remuneration pool at the AGM," Reid said.
According to Nuplex, an increase in the fee pool has not been approved by shareholders since 2007.
Nuplex's director of corporate communications, Josie Ashton, said the New Zealand dollar had appreciated by roughly 10 per cent against the Aussie dollar since 2007, so in real terms the increase was less than NZ$282,000.
Nuplex's base non-executive director fees had increased by 3.4 per cent a year, on average, since 2007, Ashton said.
She said the proposed increase in the fee pool had not been allocated for any specific purposes, but it would provide the flexibility to add a new director, expand committees and increase directors' fees in line with inflation and the market over the next few years.
Setting the fees in Australian rather than New Zealand dollars would align the fee pool with the currency in which directors were paid, Nuplex said.
One shareholder who contacted the Business Herald said the company's explanation of the fee pool increase in the annual meeting notice was a "pathetic load of gobbledygook to justify a huge increase in directors' fees".
Shareholders Association corporate liaison Des Hunt said he would be concerned if the increase was used to award directors a pay rise that was above the rate of inflation, which is currently 0.8 per cent.
An Institute of Directors survey, released this month, found non-executive directors had received a median increase of 2.9 per cent during the past year.
Last month Nuplex revealed it would close four plants across Australasia, including two in Auckland, which would result in about 80 of the firm's 800-strong Australasian workforce losing their jobs.
The company said the closures were the result of its manufacturing customers shifting production overseas because of the strong New Zealand and Australian dollars, as well as the downturn in the construction sector.
Another shareholder questioned the timing of the proposal to expand the fee pool.
"What about the people losing their jobs?" the investor asked. "I just think it's unfair."
Ashton said it was regrettable that the restructuring of Nuplex's business would affect employees.
"However, given the operating circumstances in Australia and New Zealand, Nuplex believes that the restructure is necessary to support a sustainable business in Australian and New Zealand and its remaining 720 employees into the future, as well as being in the best interests of its shareholders," she said.
Nuplex shares closed closed up 8c at $3.14.