Nuplex directors ask for shareholders for 33% pay rise

Monday 10th October 2011 5 Comments

Nuplex Industries will ask shareholders to approve a hike in the pool for directors’ fees by a third to help the board’s income keep pace with inflation.

On Nov. 2, the company’s shareholders will vote on whether to approve lifting the fee pool available for directors to $1.5 million from $1 million, according to its notice of annual meeting.

The hike will be the first since 2007, and comes in a year when the base fees for directors were left unchanged. Directors have called on the bulk of the pool for the past three financial years.

“As the current aggregate level of fees paid is approaching the level approved by shareholders four years ago, it is necessary to increase the aggregate limit to cover increases in fees in the future,” the company said. “The proposed increase in the aggregate fee pool would allow for increases in the fees paid to directors to be made to reflect increases in consumer price indices, as well as market trends, in New Zealand and Australia over the next three to five years.”

The directors’ pool was set in 2007, two years before Nuplex was forced to offer a deeply discounted rights issue to raise some $132.8 million to repay debt when the global financial crisis pushed down the New Zealand dollar and boosted the value of the manufacturer’s foreign debt.

Since then, Nuplex has strengthened its balance sheet, and lifted net profit 3.6% to $66.5 million in the 12 months ended June 30, beating its own forecast earnings.

The shares gained 0.4% to $2.71 in trading today, and have shed 24% this year.

(BusinessDesk)

BusinessDesk.co.nz

Comments from our readers

On 10 October 2011 at 2:21 pm Barry said:

Oliver Twist is alive and well and I agree that exceptional performance is deserving of worthwhile recognition. But a self employed businessman who experiences hard times has to take it on the chin. So company directors should recommened they take a reduction in fees when their performance falls below expected targets. Pigs might fly.

On 11 October 2011 at 9:16 am Tony said:

I'm happy to support the directors remuneration when my shares have regained some of the value they have lost. Just the 24% for this year would help.

On 11 October 2011 at 11:05 am H Duckworth said:

I'll be voting against any increase. As I see it, regardless of whether they have been effective in the short term, these people have been overpaid for too long, compared with ordinary wage and salary earners.

On 13 October 2011 at 1:59 am John said:

The request smacks of the Contact Energy debacle when directors sought a large fee hike. Definately voting against as can't forsee much performance upside in today's world. Was very surprised to receive this proposal especially with the explanatory notes being totally unconvicing and inadequate.

On 18 October 2011 at 2:40 pm Siena said:

I guess only the shareholders' will be able to answer the plea for a remuneration rise when they have assessed the policy for determining remuneration. A remuneration rise would depend on the enity's performance i e balance sheet, for me anyway. Executive and non-executive directors have different roles and so have different incentives. My understanding is that it is non-executive directors whose remuneration is by way of fees but then again it is important that this publicly owned entity that all benefits received must be disclosed to it's shareholders'. It is consistent with this transparency that non-executive directors should not receive retirement payments except where eligibility for such payments has been agreed and disclosed during the term of service on the board,and in the case of publicly owned entities,where shareholders have been asked to approve these payments. By some of the above comments, I cannot see any approval being given. All the best.