Air New Zealand's new boss Greg Foran issued free rights to acquire shares worth $820,000

Greg Foran started at Air New Zealand on 3 February. Photo / File

Air New Zealand's new chief executive Greg Foran was granted an incentive of free shares worth approximately $820,000 on his first day at the airline.

A notice to the stock exchange shows Foran was issued 293,840 rights to acquire new shares on February 3. The rights were issued at no cost and can convert ordinary shares if certain terms are satisfied. Air New Zealand did not provide details on those terms.

Based on Air New Zealand's recent share price of $2.79, Foran's stake is worth $819,813.
Foran was headhunted from US retail giant Walmart to replace Christopher Luxon, who was paid $4.2 million in his final year at the airline.

While Foran's salary will be disclosed eventually, Air New Zealand has not yest indicated a figure.

"It's fair to say that the remuneration is what you'd expect in a New Zealand context," chairwoman Dame Therese Walsh told the Herald last year.

"It will be disclosed in due course once we've got that all in place. From his perspective, I know there's a lot of interest in what he will be paid but I think people will think, given the calibre of the person, it is reasonable in the New Zealand context."

Foran was paid nearly US$13.4m ($21m) for leading Walmart in the US as executive vice-president of the retail giant, which has sales more than twice the size of this country's $300 billion GDP and 1 million staff.

Like Luxon when he began, he has no experience in an airline business.

Foran is not alone in receiving rights to acquire Air New Zealand shares.

Last year Luxon and 10 other executives were awarded a total of 4,746,580 performance rights under a long term incentive plan originally set up in 2015.

The rights were issued on October 21 and approved by the directors of the company on September 25 - Luxon's last day as the CEO.

The performance rights give the executives the right to receive ordinary shares subject to certain conditions being met on or after September 2022.

Those conditions include the company's share price outperforming a comparison index made up of a 50-50 mix of the NZX All Index and the Bloomberg World Airline index over a three year period.

Half of the rights will convert to shares if the share price matches the index over the period and for each 1 per cent the share price beats the index a further 2.5 per cent of the rights will convert to shares until the maximum of 100 per cent has been reached.

Luxon already owns 4,303,414 shares in Air New Zealand worth $12.14 million at the current share price.