PFI shareholders approve a 39% hike in directors' fees

By Jenny Ruth

May 8 (BusinessDesk) - Property for Industry’s shareholders have overwhelmingly approved substantial increases and changes in the structure of directors’ fees at the annual meeting.

Shareholders owning nearly 99 percent of shares voted to support the increases.

The last change to directors’ fees was back in 2016 when the total directors’ pool was capped at $430,000 and the changes include a move to a per-director rate which, based on the current and expected board composition, will effectively increase overall fees by 39 percent to $597,500.

Chair Anthony Beverley’s fee will rise 33 percent to $160,000 a year under the new structure while individual director’s base fees will rise 18 percent to $82,500, up from $70,000, and the chair of the audit and risk committee chair’s fee with jump 50 percent to $15,000 on top of the base fee. A new position of chair of the nomination and remuneration committee with be paid an additional $10,000.

In addition, the board may appoint another independent director who would be paid the per-director rate of $82,500 a year.

As well, there is now an allowance to pay directors $350 per hour for “abnormal and particularly time intensive projects or transactions outside the scope of typical board work,” replacing a previously capped provision of $20,000.

Beverley told the meeting the company has only made those exceptional payments twice in its history as a listed entity, which began in 1994, and that he was the most recent recipient in 2017 when PFI switched from being an externally managed trust into a company with internalised management.

The new proposed hourly rate is “about a third of what would be paid to an independent advisor,” the occasions on which it would be paid will be “very rare” and the hurdle for such payments is “pretty high,” Beverley said.

“It’s not expected to be a common thing but it’s there if we need it.”

Shareholders at the meeting queried directors about the increases, asking for more information – Beverley directed their attention to an independent report by StrategicPay published on PFI’s website.

The New Zealand Shareholders’ Association had described the new fees as being “at the top end for the size of the company,” although it had committed to vote in favour of the increase.

PFI had consulted NZSA ahead of its meeting, clearly one reason the resolution had such a smooth passage.

NZSA said in its advice to members on how it would vote proxies that although companies generally set allowable fees higher than what is actually paid, NZSA is “always chary of headroom as it can be used to allow an increase in fees to existing directors without recourse to shareholders for approval.”

Despite fees being high, “that is partly mitigated by the lack of committee fees, excepting chairs whose new rate is acceptable.”

PFI also showed it has listened to NZSA comments on the longevity of some of its directors and the need to refresh the board.

Humphry Rolleston, who has been on the board since the company listed, has advised that he won’t stand for re-election – he was last re-elected for a three-year term at the 2017 AGM.

Long-serving director and chair Peter Masfen retired last year while Beverley has sat on the board since 2001.

PFI's shares are down half a cent at $2.01.

© Scoop Media