Investor group takes on SkyCity fee rise

Des Hunt says SkyCity's operating performance has been flat since 2008. Photo / APNZ

The Shareholders Association looks set to lock horns with listed casino operator SkyCity Entertainment at its annual meeting on Friday over proposals to boost director fees.

Association director Des Hunt said increases of 25 to 33 per cent were well ahead of inflation, which had been about 16 per cent since the last increase in fees in 2006.

"Basically they're saying 'we haven't had a rise for six years and we're looking at our peer group ... we've got some catching up to do'," Hunt said.

The association accepted some increase was necessary and supported providing additional funds to appoint a deputy chairman.

It had suggested to directors that they should take half the proposed increase this year and the balance next year, dependent on results, which would be a fairer decision to shareholders and a better reflection of the economic conditions.

"We had difficulty approving the whole lot at this stage because it's not backed up by performance."

Hunt said the company argued its total return to shareholders (TRS) was better than many, but he said that ignored the fact that since 2007 the TRS has fallen.

SkyCity's operating performance had been flat since 2008, Hunt said.

The association would have representatives at the annual meeting. "What we're hoping is that they back down and then we could say something nice about them."

Many of the association's members were unhappy "and what we've come up with is what we feel is a fair compromise".

"We're saying, hey, let's reward performance, don't let's be wrong about that, but at the moment we don't see its justification having large increases based on just because other people are doing it," he said.

"We've got to stop that practice."

A spokesman for SkyCity said: "The resolution hasn't changed and the company still believes it is a well considered position that we are happy to put to shareholders on Friday."