By CHRIS DANIELS energy writer
Round two in the battle to remove the right of company directors to decide their retirement benefits starts today.
The latest battleground will be Contact Energy's annual meeting at the Aotea Centre in Auckland.
Graeme Bulling, Contact shareholder and member of the Shareholders Association, will propose a
motion to restrict a director's retirement allowance to no more than 10 per cent of the total remuneration he or she has received. Shareholders must also approve such a payment.
Bulling, who got Restaurant Brands to change its directors' retirement policy, said the problem was the New Zealand Stock Exchange's requirement in its listing rules.
This says all listed companies have to have a clause in their constitution that retiring directors can be paid out no more than their total remuneration in any three years of their time on a board, which companies are regarding as the norm.
In an explanation to Contact shareholders, Bulling said two former directors, Andrew Thomson and Brian Wood, were paid a retirement allowance of $65,000 each, compared with their annual directors' fees of $29,200.
The principle of directors working out their own benefits without any shareholder input was what the fight was about, said Bulling.
"Would the directors say to management, 'You guys go into a room and work out your own retirement benefits?
"Would management let ordinary staff work out their own retirement benefits?"
Bulling said the success or failure of his move depended on what 51 per cent owner Edison Mission decided to do at the meeting. It has the voting power to scuttle the proposal.
"Edison are guests in our country. If they want to be seen as responsible investors who take account of the aspirations and feelings of their fellow shareholders, financially this is a minuscule matter," Bulling said.
The Shareholders Association would start going company to company if the exchange did not axe the clause on retirement benefits.
Another proposal likely to prompt discussion today is a motion by Arcus Investments. It would require Contact to seek shareholder approval if it enters any deal with Edison.
