SkyCity presses on with fee raise vote

Des Hunt. File photo / Kenny Rodger

The Shareholders' Association has welcomed Nuplex's decision to back down on a plan to pump extra funds into its directors' fee pool after investors put pressure on the company.

But the group's corporate liaison, Des Hunt, said it was disappointing that SkyCity Entertainment will go ahead with a vote to increase its annual non-executive director fees from $950,000 to $1.3 million when it holds its annual meeting in Auckland on November 11.

Sydney-based, NZX and ASX-listed speciality chemicals maker Nuplex had planned to ask its shareholders to vote on lifting the upper limit of its aggregate fee pool from $1 million to $1.5 million a year, for the next three to five years, at the firm's annual meeting next week.

The company said it had planned to use the additional funds to increase its resources - possibly through an additional director or new sub-committee - as well as provide individual directors fee increases in line with inflation and performance.

But yesterday Nuplex chairman Rob Aitken said some shareholders had raised concerns about the long time-frame and "consequential quantum" that the directors' fee pool increase was intended to cover.

"Given these uncertain times, we appreciate that our shareholders might prefer to approve changes to the fee pool on a more regular basis and in smaller increments than was initially proposed," said Aitken.

Hunt said he hoped other listed firms would act like Nuplex.

"[For] far too long we have seen massive increases in director and executive pay which has had no relationship to the actual performance of the company," he said.

Hunt said the Shareholders' Association had raised concerns with SkyCity over its planned directors' fee increase, but the firm appeared to be forging ahead with the vote.

"This is a substantial increase when everyone else is suffering and we think it's outrageous," he said. "I would have thought SkyCity would have at least been prepared to make a compromise."

Hunt said the association was going from company to company looking at the kind of fee increases firms were seeking for their boards.

"We're not knocking everybody - we're just knocking those that are wanting large increases without relativity to performance."

Hunt said the fact Nuplex had backed down showed shareholders had the power to force change in companies.

The chief executives of New Zealand's biggest listed firms and state-owned enterprises received an average pay rise of 14 per cent in the 2010 financial year, the Business Herald's executive pay survey, conducted earlier this year, showed.

For all New Zealanders, the average wage increase was just 1.7 per cent in the year to the December 2010 quarter, Statistics New Zealand figures show.

DIRECTORS' FEES

Backed down - Nuplex
* Planned to hold a vote on increasing its directors' fee pool from $1 million to $1.5 million, but withdrew the proposal under pressure from investors.
* Annual shareholders' meeting scheduled for November 2.

Going ahead - SkyCity Entertainment
* Will put to a shareholder vote a proposed increase in annual total non-executive directors' fees from $950,000 to $1.3 million.
* Annual meeting scheduled for November 11.