Shareholders aim to prise Feltex ex-boss from board

Former Feltex chief executive Sam Magill's remaining tie with the company - that of board director - is under threat from shareholders. The New Zealand Shareholders' Association has tabled a resolution for shareholders to be able to vote Magill off the board - unless he goes first.

A letter to the association from Feltex executive director Peter Thomas shows board support for the resolution, and the wording of explanatory material to accompany the voting documents to say:

"Mr Magill has held the dual post of director and executive of the company. His employment with the company has been terminated, the terms of his severance are in dispute, but he has failed, refused or neglected to resign as a director."

Association advocacy director Ross Dillon thinks the resolution may be redundant by the time of the annual meeting on December 1 in Auckland.

"We expect he's likely to leave before he makes himself the scapegoat by standing up in front of the AGM and saying he wants to stay."

Magill resigned as chief executive in June after the company's second profit downgrade this year. His contract was terminated in late September after a failure to agree on terms for his severance payout.

The board believed the $454,000 Magill received as part of a $1.3 million payout to four top executives who shared responsibility for the downgrades was "adequate", and was not prepared to increase it.

Chairman Tim Saunders said Magill had still not responded to the board's request for his resignation as director.

He ceased to be an employee on September 26 and has not received any directors' fees since.

Forsyth Barr, whose clients own about one-quarter of Feltex in shares, is understood to be supportive of the directors' motives to oust Magill.

Dillon believed Magill was effectively using his directorship as a lever in his negotiations.

"On behalf of all the shareholders who are going to be funding his leaving package, this was a little lever we thought we could usefully remove from him."

Also on the floor for discussion at the meeting will be the company's profit downgrades, projections, the share price and its subsequent performance.