1.00pm
Telecom Corp said today director John King was stepping down and he was getting a $310,000 goodbye handshake.
Mr King, a consultant with law firm Russell McVeagh and chairman of the Takeovers Panel, has been a director since 1990.
Telecom is in the process of ending the controversial scheme of paying retirement
allowances to directors. Instead, it plans to pay directors 25 per cent more and terminate the retirement allowances.
Freightways and Ngai Tahu chairman Wayne Boyd, who is replacing Mr King, is engaged under a new type of contract so he will be paid a base fee of $131,250 against the old director's base fee of $105,000.
"This increase was set after independent verification that the amount of the increase fairly reflected the fact that new directors would not be entitled to a retiring allowance," chairman Roderick Deane said.
The increased fee would be required to be invested in Telecom shares, Dr Deane said.
Payment of a retirement allowance was discretionary although Telecom has formalised that through a formula. Directors such as Dr Deane, who is paid an annual fee of $350,000, will still be paid a retirement allowance.
Mr King is the second recent resignation from Telecom's board. Last month, Lindsay Pyne announced he was quitting the board from September, citing growing commitments in Asia. Mr Pyne was chief executive of the Bank of New Zealand during troubled times in the early 1990s and was a controversial appointment strongly opposed by the Shareholders Association.
Telecom said it expected to make a new board appointment within a month.
The total paid to directors was increased by 58 per cent -- from $950,000 to $1.5 million at the Telecom shareholder meeting in October. That increase will cover both the new payment regime and a planned increase in the size of the board.
Mr Boyd is a also a director of Tru-Test and on the advisory board of Fairfax NZ and the Forsyth Barr Group. The Telecom board has determined that Mr Boyd will be an independent director as defined in the company charter and NZX listing rules.
Telecom shares were down 1c at $5.77 today.
- NZPA
