Rakon board seeks fees rise to cover new director
"Gotto love this company and laugh at the antics of the directors!"
Featured commentBUSINESSDESK: Rakon, the communications components maker which dropped out of the NZX 50 index last month, will ask shareholders to lift its pool for directors' fees to cover the latest addition to the board.
The Auckland-based company wants to increase the maximum aggregate amount of fees to $360,000 from the current $300,000, and will put the motion to shareholders at its September 7 meeting in Auckland.
Chairman Bryan Mogridge told BusinessDesk the increase will be used to cover the May appointment of Peter Springford as an independent director.
Mr Springford, a former chief executive of Carter Holt Harvey, will also be up for re-election at the annual meeting.
He was invited to join Rakon's board because of his business experience in China, which it hopes to draw on as it boosts its footprint in Asia.
The board hasn't increased its fee pool since 2007, when shareholders approved lifting it $60,000 to the current $300,000 level. That was done to retain directors and set their pay at a level appropriate to market prices.
The increase comes as Rakon top executives Brent Robinson and Darren Robinson face a pay cut in the 2013 financial year as the variable component of their remuneration kicks in after profits in the latest financial year.
They each got a pay rise, thanks to the stronger result a year earlier.
Rakon's shares climbed 6.7% to 48 cents in trading today, and have more than halved over the past 12 months.
The stock is rated an average "outperform", according to a consensus of five analysts compiled by Reuters, with a median target price of 66 cents.
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Comments and questions7
Gotto love this company and laugh at the antics of the directors!
Last increase was in 2007 when share price was over $4.00.
Now they want an increase - when they have presided over a destruction of wealth of over $500m!
Surely they should be looking at reducing directors' fees to reflect the diabolical job they have done but in classic fat-cat fashion, it's heads we win, tails shareholders lose.
Oh yes - it's that clown Bryan Mogridge in action again!
Next he will be asking for an increase in PGC directors' fees as he has been unfortunate enough to preside over another huge destruction of shareholders' wealth there too!
Agreed, And here I was thinking it was just me who had noticed Mogridge's name attached to these massive losses. Remember to vote against him in the current shareholders director election.
Bryan Mogridge reminds me of all the other used-by-date directors and Chairmen whose presence on a Board is a good reason to avoid the stock like the plague.
Look at the other two used-by-date directors/Chairmen - Bill Falconer & Keith Smith. Hellabys, Restaurant Brands, Wrightson, Warehouse ...the list goes on and on!
Why do shareholders go along with rises in fees when every else has had to tighten their belts, ESPECIALLY when they're not making more? At a Hellaby's vote, only 2-3 of us voted against.
Bill Falconer (who seems to have been on many boards/trustee of many outfits with wide spheres of influence) seemed to me a peaceable man who knew when to "shut up" and ran Hellaby's AGM's which were pleasant to attend with tea and scones.
But is that the criteria for chairmen of the board these days?
I don't believe shareholders will sit on their hands as far a Rakon is concerned. I voted against them getting a pay rise via mail just the other day.
Also don't agree with the cr*p about facing a pay cut this year - still doesn't say a thing about the ridiculously high base salaries their both on - also not sure how they think 2012 was a success! my shares are down 60% over the last 4 years
Sadly, the majority of the shares in Rakon are controlled by the Robinson family, so what they say goes. Small shareholders have no say!! It is the reason that many larger institutions have quit or reduced shareholdings in Rakon, adding to the price fall. The share price will not improve until Rakon finally starts paying a dividend. With the high executive pay levels there are no current incentives to do so.