Xu Jun, Chairman China State Farms Holdings Shanghai (distributor of A2 milk products in China) and Geoff Babidge, chief exec of A2 Corporation. The company wants to increase director fees by 140pc.
Xu Jun, Chairman China State Farms Holdings Shanghai (distributor of A2 milk products in China) and Geoff Babidge, chief exec of A2 Corporation. The company wants to increase director fees by 140pc.
The New Zealand Shareholders' Association has taken a swipe at alternative milk company, A2 Corp, over a proposed 140 per cent increase for the company's feel pool for directors.
Association chairman John Hawkins said the NZSA would oppose the proposed increase in the pool at A2's annual meeting next week.
"An increase of $350,000 in the fee pool, from $250,000 to $600,000 is simply too much," Hawkins said in a statement.
Hawkins said A2, which listed in 2004, had provided little, if any, enduring shareholder return until mid 2010.
But the association acknowledged that since then shareholders had enjoyed strong returns through the increased market value of their shares and it took this into account when reaching a position.
The association also recognised that A2 director's fees needed to rise from the level they were at in 2011.
Since then, large increases in fee payments had occurred in both the 2012 and the 2013 financial years which had redressed the position, Hawkins said.
He said the NZSA was not opposed to some further increase this year, particularly since allowance needs to be made for the appointment of an additional director.
"However, concern over the extent of the fee rise has led to the association's current concern, with A2 proposing to pay non-executive directors $60,000 - an increase of 76 per cent - and the chairman $100,000 (41 per cent)," Hawkins said in a statement.
Spokesmen for A2 were not immediately available for comment.
A2 is also seeking shareholder approval for a potentially material agreement with Pactum Australia, a wholly owned subsidiary of related party and A2 shareholder, Freedom Foods Group.
Hawkins said that while related party deals can often be problematic, the independent appraisal report issued with the notice of meeting suggested that the key issues have been adequately covered, although shareholders may have some reservations around the term of the deal and some of the details.
He said that after careful consideration, the association would vote in favour of the proposed agreement, although that would be subject to review if new information came to hand.
A2 also proposes to change its constitution so that the maximum number of directors can be increased from seven to eight.
