Airline board cuts own pay

By Phil Boeyen, ShareChat Business News Editor

Monday 8th October 2001

Directors at Air New Zealand (NZSE: AIRVA) have cut their annual payments by 50% and say that former board members will not be paid out any retirement allowances.

The prudent moves come hard on the heels of news that the company is curtailing its international schedule in the wake of the US terrorist attacks and is looking to shed staff.

The new Air NZ board decided at a meeting on Monday to cut directors fees from $90,000 a year to $45,000 and to drop the chairman's payment from $160,000 to $90,000.

"The new board believes these steps are appropriate in a time when we are reducing our flight schedules, trimming staff, and working toward a recovery from the company's worst loss on record," says acting chairman, Jim Farmer.

In total the cost of running the airline at the board level will drop from $1.24 million last year when 13 people sat at the table to $405,000 with 8 directors.

Dr Farmer says the board is grateful that several of the former directors, who resigned last week, advised in advance of Monday's meeting that they would not accept any payment of the retirement allowance provided for in the company's constitution.

"This meant it was unnecessary for us to even consider the matter."

The decision by directors not to take any retirement payment will be regarded by many investors as entirely appropriate in light of last week's $885 million taxpayer funded bailout of the company following its massive $1.425 billion loss for the year ended June.

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