The Occupy Wall Street movement seeks to call attention to what many perceive as excessively high remuneration packages. For example, Directors of large companies manage to skim large salaries for small amounts of work and justify it on their experience.
Here's an example, and it's rather random because I just picked it up as the first item from this article: Ransom demands from Board of Directors: Skellerup proposes a 48 per cent fee increase in the Directors pool for non-executive directors, from $320,000 to $475,000. They have their reasons of course.
As for "market rate" - Have they tried offering the job at the current rates of around $100K plus? What about the issue of shares? The typical mansion is getting cheaper, what, with a world wide recession and all, and if you buy a Koru Club 5 year membership you can save quite a bit of dosh on the one year rate. Time to economize perhaps and start treating shareholders with a bit more respect.
If Directors fees are going to be increased, the "bite you in the ass" clauses need to get a lot more serious, so that Directors deliver value for that amount of money. And perhaps directors need to start arguing that share distributions could be included for staff. Given Sir Cushing spent a bit of time raising capital (and that means bonus shares) perhaps he could consider allocating some of those bonus shares into a staff pool?
Whilst I think that the OWS movement is full of communist leaning people, with diverse agendas, they still have a point. Reform will only start if these things become more widely discussed.
Here's an example, and it's rather random because I just picked it up as the first item from this article: Ransom demands from Board of Directors: Skellerup proposes a 48 per cent fee increase in the Directors pool for non-executive directors, from $320,000 to $475,000. They have their reasons of course.
- Fees have not been raised since September 2006.
- Skellerup wants to raise its fees to attract "the highest quality directors"
- It's a "market rate"
As for "market rate" - Have they tried offering the job at the current rates of around $100K plus? What about the issue of shares? The typical mansion is getting cheaper, what, with a world wide recession and all, and if you buy a Koru Club 5 year membership you can save quite a bit of dosh on the one year rate. Time to economize perhaps and start treating shareholders with a bit more respect.
If Directors fees are going to be increased, the "bite you in the ass" clauses need to get a lot more serious, so that Directors deliver value for that amount of money. And perhaps directors need to start arguing that share distributions could be included for staff. Given Sir Cushing spent a bit of time raising capital (and that means bonus shares) perhaps he could consider allocating some of those bonus shares into a staff pool?
Whilst I think that the OWS movement is full of communist leaning people, with diverse agendas, they still have a point. Reform will only start if these things become more widely discussed.
PS: I'm not trying to pick on Skellerup or Sir Peter Cushing here; he may be doing a good job. I am however highlighting the "3 reasons" given to increase the Director Fee pool sound a little lame when the discussion of shares and dividends is left out, and this seems to be a common factor in a lot of these deals.
ReplyDeleteHere's some further info: Cushy job?
Are you seriously arguing that $100k is a resonable rate for a directorship on a company the size of Skellerup?
ReplyDeleteI have frigging graduates paid not much short of that!
Are you seriously ignoring the 700k in dividends paid last year?
ReplyDeletePlease re-read my post. I don't care what Directors are paid for a few days work every month in the general scheme of things. I am pointing out though that the $130k was not his entire compensation though was it? And even so, having said this in the post you couldn't get past the base fee. Guess how many shares he is asking for to gift one of his colleagues this coming meeting?
An interesting aside:
ReplyDeleteIt seems Skellerup have to spend some of their Director Pool money appointing another independent Director pronto, having been fined $25,000 for being in breach of NZX requirements.
Also, Sir Cushing is Chairman for Rural Equities Ltd, a director for PGG Wrightson and his day job is a partner in a financial advisory business. He's made the NBR rich list, so he obviously manages to scrape minimum wage out of these gigs, although that isn't really material to the post.
Sir Cushing doing alright
Oops - just spotted a hilarious typo in my first comment. Sorry - not *Peter*, the actor, but Selwyn.
ReplyDelete