Nuplex director fee change approved
Nuplex shareholders have approved a plan to increase to the director's fee pool by converting it to Australian dollars.
The fee pool will increase from $NZ1 million to $A1 million.
Chairman Rob Aitken argued at its annual general meeting today at the move is sensible because the directors are all paid in Australian dollars.
The shareholders association opposed the move on the grounds the company's performance didn't warrant a fee increase for directors.
The motion was initially lost by a show of hands, but later approved by poll voting.
EARLIER: Nuplex shareholders have hit out at an attempt by its board to change the currency of the director’s $1 million fee pool to Australian dollars.
Shareholders have voted on the proposal at the company's annual meeting today and the result will be notified to the NZX later today.
Chairman Rob Aitken told shareholders the change from $NZ1 million to $A1 million was reasonable and necessary.
Prior to July 2010, Australian and New Zealand directors were paid in their respective currencies, but the board decided to pay all directors in Australian dollars to prevent any disparity caused by a fluctuating exchange rate.
“Setting the aggregate fee pool to $A1 million will align it with the currency in which directors fees are paid,” Mr Aitken says.
The shareholders association called for the move to be voted down.
Chairman John Hawkins told NBR ONLINE the association is not against fee increases, but only if they are backed by performance.
“The problem that we see is that the director’s fees have risen disproportionate to the company’s performance.
“In 2010 the company raised its fees by changing them from New Zealand to Australian dollars, which was about a 28% increase at the time."
He says since then the company has continued to raise the fees annually except for last year.
“Most of the metrics the company can influence have actually decreased over the past three years, such as EBITDA, operating and net profit, and return on shareholders' funds.”
Mr Hawkins says the association does not expect to win the vote because of a lack of institutional support, but it is a vote on principle.
There were few other issues from other shareholders at the meeting, except for one who expressed disappointment at the lack of long-term growth in his investment.
“I invested in the company in 2001 at $3.35 a share. Since then, I have reinvested my dividends, the price of which has varied from $4.91 to $7.02,” he told Mr Aitken during a question-and-answer session.
“Since 2001, my investment has achieved a 9.85% loss. I don’t think that’s very bright.
“You can see why I’m not happy. You’ve got all the good things you say about the company, but what about the investor?
“Losing 9% over 11 years is not a good result.”
In reply, Mr Aitken says while returns have been static in the past couple of years, Nuplex has a good track record of delivering positive returns.
“Apart from two half-year periods, we have paid a very good dividend yield. I hope you’re taking that into consideration.”