Telecom resolutions lost but not without some support

By NZPA

Friday 11th October 2002

Shareholders Association chairman Bruce Sheppard lost four resolutions he put to Telecom's annual meeting yesterday, but not without some support.

Mr Sheppard questioned the company's current practices on directors' and senior executives' pay.

His request that the board investigate methods for aligning directors' pay with company performance gained 22 percent support .

His resolution that retirement fees be abolished gained nearly 21 percent of the votes, and a call for a review of the incentives paid to key executives gained nearly 16 percent.

Mr Sheppard said he was not against high pay packets necessarily but wanted their remuneration to be more linked to the creation of long-term shareholder value.

His call for an end to the company's share option scheme, on the grounds that it was actually a disincentive when the company's share price fell below the option price, gained 14 percent favour.

Telecom launched a pre-emptive strike at yesterday's meeting in Wellington, explaining to shareholders how its staff were paid and how many had a component related to their individual and company performance.

Chairman Roderick Deane said that given the board already reviewed the company's remuneration on a regular basis, he was pleased shareholders saw no need to carry out a further special review. "We certainly endorse the right of shareholders to question and better understand what goes on, and we will take account of their views in future reviews," he said in a statement.

Other resolutions relating to changes to Telecom's constitution required by the Australian stock exchange were passed.

Also at the meeting, shareholders voted to re-elect Patsy Reddy and Michael Tyler to the Board. Ms Reddy and Mr Tyler were required to retire by rotation but, being eligible, offered themselves for re-election.

During the meeting, Mr Sheppard presented Dr Deane with the Shareholder Association's inaugural `Beacon' Award for Telecom's new policy regarding auditor independence.

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