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Summerset seeks to boost directors’ fee pool by 50% as board gets rejig

Summerset Group [NZX: SUM], the retirement village operator and developer, will ask shareholders for a 50 percent bump in the directors' fee pool to account for a rejigged board, having delivered a 153 percent boost in the company's stock price since it listed in 2011.

The Wellington-based company wants to lift the pool for directors' fees to $600,000 from $400,000, which it says will compensate the directors who replaced representatives of former cornerstone shareholder Quadrant Private Equity, and chief executive's Norah Barlow's transition out of management next month. The higher fee pool would allow Summerset add another director.

"This increase in the fee pool is primarily necessary due to changes in the composition and size of the board," the company said in its notice of annual meeting. "Based on recent research the proposed fees are in line with the fees paid to directors of comparable sized listed companies in New Zealand and below those of comparable sized companies in Australia."

The $400,000 fee pool was set in November 2011 when Quadrant sold down its stake and listed the company on the NZX. Quadrant's representatives on the board had taken lower fees than other non-executive directors, while Barlow didn't receive director fees as managing director.

Quadrant sold the shares at $1.40 in the initial public offer, and the stock has soared 153 percent since then to $3.53, while paying dividends of 5.75 cents per share. Over the same time, the benchmark NZX 50 index gained 53 percent.

Summerset's new fee structure would lift the chairman's fee by $15,000 to $165,000, non-executive directors' fees by $5,000 to $80,000, and raise the additional fee for chairing the audit committee by $5,000 to $15,000. The bigger pool would also cover a $7,500 fee for the chair of the remuneration committee.

Shareholders will also be asked to amend the company's constitution to incorporate ASX listing rules to comply with its Australian dual-listing.

The annual meeting will be held in Wellington on April 30.

Last month the company reported annual profit more than doubled to a record $34 million in calendar 2013, as sales of occupation rights to its retirement units reached an all-time high.

(BusinessDesk)

Comments and questions
5

Yeah go for it Sommerset!! you are screwing the Red Blood Cells right out of the Elderly!! by your excessive profits, that a few more is not going to hurt too much we assume, just leave us a little bit for the groceries, plus our National Rugby Team will be expecting increased returns as well, so you might as well take all of everyone's life's work of savings.
Sommerset we the Elderly came into this World with nothing, and you are going to see to it that we leave with nothing.

Gen X/Y/Z: Houses are too expensive!

Elderly: No, your me me me generation need to lower your expectations, there are plenty of cheap houses in Mangere, Otara, Gore et el, you kids want it all now. Don’t expect your first house to be a flash mansion….. We owe you nothing

Elderly: Retirement villages are sucking us dry! They are too expensive!!

Gen X/Y/Z (possibly SUM, MET, RYM shareholders): No, your me me me generation need to lower your expectations, there are plenty of cheap retirement villages in Mangere, Otara, Gore et el, you just want it all now. Don’t expect your first retirement home to be a flash mansion…..The world owes you nothing

Well said - you've hit the nail right on the head. Retirement Village Operators, Financial Asset Management Companies - all who 'care' for the elderly have one goal - to make sure you have nothing left.

Who is forcing anyone to buy into a retirement village? Comments look like a mean offspring who doesn't want their parent to enjoy their life?

Very very good sales persons in the "Blue Star" mold who are verbally far too smart for the venerable elderly, we were on the end of the very persuadable "pitch" at one point, and my wife was really sucked in, but we were of an age that we didn't qualify to reside there, we did the financials and we will stay where we are.