NZ Exchange chairman Simon Allen (right) announces the reduced bonus package for chief executive Mark Weldon. Photo / Mark Mitchell
New Zealand Exchange chief executive Mark Weldon's downsized bonus package was approved in short order at a swiftly concluded special meeting yesterday at the market operator and regulator's offices in Wellington.
The scheme, which replaced an earlier controversial proposal, was passed unanimously in a show of hands by
the 20 or so shareholders in attendance.
In any case, NZX chairman Simon Allen said a large number of proxy votes had been cast, 95 per cent of which supported the proposal.
The earlier scheme sparked a shareholder outcry after revelations that, combined with his existing holding, Weldon could have ended up with an almost 10 per stake in the company worth about $22.5 million.
Under the new scheme, which also involves a cash component, the maximum amount of shares Weldon will receive if he achieves his entire bonus is 1.44 per cent of the company.
Added to his current 5.2 per cent stake, that would take his total shareholding to around 6.6 per cent, worth $15.4 million at current share prices.
"What we didn't fully appreciate was that there had been quite a change in approach and sentiment to those type of schemes," said Allen yesterday.
NZX had also erred by not consulting sufficiently with major shareholders.
Bonus scheme
* If NZX earnings per share achieve 15 per cent compound annual growth, Weldon receives a bonus of $500,000 cash per year and a total of up to 222,276 shares which would vest in his name.
* If NZX earnings per share achieve 22.5 per cent compound annual growth, a further 128,381 shares would vest in Weldon's name.
* Weldon pays today's prices for the shares and is given an interest-free loan to cover the cost.
* The scheme runs until 2010 but can be extended to 2011.
The first scheme - based on a scheme from five years earlier - was dropped after major shareholders objected.
