Spark scraps directors’ fee increase amid criticism

Article – BusinessDesk

Spark scraps directors’ fee increase amid shareholder ‘sensitivity’ around pay hikes

By Suze Metherell

Oct. 30 (BusinessDesk) – Spark New Zealand, the telecommunications operator, has pulled a proposal to boost directors’ fees by 5 percent, after negative feedback from shareholders and general sensitivity to hikes in board payments.

The Auckland-based firm had planned to ask shareholders next Friday to vote on an $80,000 increase to the directors’ remuneration fee pool, taking it to $1.58 million annually. Today Spark said it was scrapping the resolution given the “current sensitivity” around directors lifting their fees.

“We firmly believe the proposed increase in the directors’ remuneration pool was justified, given that it has not increased in over a decade and the modest proposed increase of 5 percent meant the increased pool would benchmark well with comparable listed entities in New Zealand and Australia,” chairman Mark Verbiest said. “The board continually monitors shareholder feedback, and while many shareholders were supportive of the increase, current sensitivity regarding director fee increases meant some had expressed concern.

“In light of feedback to date, we have decided not to put this resolution forward as we believe it will detract from the solid progress that Spark New Zealand is making for shareholders.”

The decision to scrap the fee hike resolution comes as listed companies face shareholder scrutiny at AGMs over proposed increases to directors’ fees.

Earlier this month, Sky Network Television came under fire from the New Zealand Shareholders Association for its disclosure and transparency in a resolution asking for a $200,000 a year increase in the pool available to pay directors’ fees, although no other shareholders raised questions on the move. Ultimately shareholders approved the lift in the fees.

Yesterday, at its annual meeting, Freightways’ board also faced questioning from shareholders, as it lifted the fee pool 7.5 percent to $484,000, following an independent market review in order to bring non-executive directors remuneration in line with other companies.

NZSA spokesman Des Hunt said the association was unimpressed with independent market reviews of director fees in general, but Freightways increase was reasonable given how well the company was performing.

Spark shares fell 1.1 percent to $3.295 and have gained 6.9 percent since the start of the year.

(BusinessDesk)

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