By FIONA ROTHERHAM
Appliance and healthcare group Fisher & Paykel has backed down on a proposed issue of discounted shares to executive directors following shareholder concerns.
At the same time, Capital Properties has staved off criticism from shareholders opposing a 25 per cent rise in directors' fees to $150,000 by withdrawing the motion at the start of this week's annual meeting in Wellington.
Chairman Colin Beyer said that the motion to increase the fees from $120,000 in total for the four directors was withdrawn because an overwhelming majority of its small shareholders had said they were not in favour of it.
However, disapproval from institutional shareholders has not deterred listed transport company Mainfreight from putting a motion at today's annual meeting in Auckland for approval to issue more discounted shares to employees than is allowed under Stock Exchange listing rules. It can do so, providing shareholders agree.
Institutional shareholders of Fisher & Paykel talked to the company about its plan to offer 110,000 ordinary shares at a 33 per cent discount on market price to four executive directors.
Fisher & Paykel was to lend directors Lindsay Gillanders, David Henry, Gary Paykel and Julian Williams the amount needed to buy the shares, with interest charged of at least 2.5 per cent a year.
In previous years, shares issued under the same executive staff share purchase scheme have been passed five times without dissent. Shareholder AMP, which has an 8 per cent holding, would not comment on what it said to the company about the offer.
Axa NZ's chief investment officer Barry Lindsay said he asked for the scheme to be amended rather than withdrawn as it was "too generous" and transferred value from the shareholders to those staff eligible.
Axa holds 5 per cent of Fisher & Paykel, according to the annual report.
Fisher & Paykel said it decided to withdraw the motion from next week's annual meeting because of the current Deutsche Bank strategic review of the manufacturing group.
Corporate affairs manager Richard Blundell said it was concerned that issuing the shares while that review was under way could have raised insider trading speculation, even though the shares cannot be sold for eight years.
The Deutsche Bank review will now encompass the executive share purchase scheme and other options. It is due to report later this year.
Most market attention is focused on whether it recommends splitting off the company's lucrative healthcare division from its whiteware manufacturing.
Mainfreight will today ask shareholders to approve issuing a further 2 per cent of capital under its share purchase scheme, which applies to all employees.
The Stock Exchange listing rules prevent companies issuing more than 5 per cent of capital in five years or 2 per cent in one year.
Mainfreight has so far issued 4 per cent of its shares in the past four years and wants to boost that this year by a further 1.4 million shares or 2 per cent. The shares are to be issued to 1200 staff who have worked there more than a year, at a market discount of 30 per cent. Mainfreight, known for its employee-friendly stance, said it would provide an interest-free loan for a total $2 million.
Managing director Bruce Plested said he and his partner owned 40 per cent of the company and he did not expect any problems, despite some institutional shareholders indicating they would vote against it.
"If they don't like what we're doing they can sell their shares. We can't have institutions telling us how to run the flaming business."
F&P retreats after shareholder revolt
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