Auckland Airport grants more ‘phantom’ options to Moutter

Auckland Airport grants ‘phantom’ options to Moutter to ensure he stays around

July 5 (BusinessDesk) – Auckland International Airport Ltd., whose shares have outpaced the benchmark NZX 50 Index in the past three years, has granted chief executive Simon Moutter 2 million ‘phantom’ options and agreed to a one-time retention payment of $750,000 if performance targets are met.

The nation’s busiest gateway won’t issue any securities but the ‘options’ will mirror the performance of the company’s shares and will pay out only if the compounding total shareholder return exceeds 12% a year.

The airport would be required pay cash to its CEO based on the value of the underlying shares but minus $2.093 apiece, the notional exercise price of the ‘phantom options.’ At today’s price of $2.24, that would amount to $294,000. Moutter can exercise the ‘options’ in three tranches in August 2013, 2014 and 2015.

The airport didn’t disclose the earnings performance thresholds that would trigger the one-time ‘retention’ payment in August 2013.

Chairwoman Joan Withers said the incentives are “designed to secure the retention of Mr Moutter and continue his current strong focus on the achievements of the company’s objective of long term shareholder value creation.”

Auckland Airport was “very satisfied” with Moutter’s management of the company over the past three years and the new incentives were aimed at “ensuring that Mr Moutter remains fully engaged in driving the performance and growth of the company for at least another three years,” she said in a statement.

This marks the second set of ‘phantom options’ the airport has extended to its CEO, after granting 3 million when he was hired in 2008. Those original ‘options’ are currently out of the money, which the airport said reflected the fact they were issued prior to the global financial crisis.

Moutter will still be entitled to the options even if made redundant or his employment is terminated for any other reason, the company said.

The airport company's shares have gained about 20% in the past three years while the NZX 50 rose 12%.

(BusinessDesk)

© Scoop Media