Tenon boss on up to $1.3m

Wood products company Tenon's request for a stock exchange waiver has revealed new chief executive Mark Eglinton's pay package could top $1.3 million in a single year.

Tenon entered into an employment agreement with Eglinton that was conditional on Tenon getting shareholder approval or a stock exchange waiver.

That was because the package - including incentive payments - could top 0.5 per cent of the company's average market capitalisation, or $1.3 million, in a single year.

US-based Eglinton's US$477,800 ($709,652) pay packet would be made up of US$250,000 ($371,312) basic pay, US$125,000 ($185,656) performance bonus and $103,000 ($152,981) worth of benefits each year.

However, this excludes incentive scheme entitlements which, if aggregated and exercised in a single year, could push his pay above the $1.3 million threshold.

Benefits under the incentive scheme potentially accrue to Eglinton after three years if annual growth in earnings per share increases by a compounding 10 per cent each year.

NZX agreed to a waiver, provided the company's remuneration committee confirmed that:

* It believed the package represented fair value to Tenon;

* The agreement had been made on an arm's length, commercial basis;

* The decision to enter the package was not unduly influenced by, and was made independently from, Eglinton; and

* The deal was in the best interests of shareholders.

Formerly Fletcher Forests, Tenon has been drastically downsized into a company with a manufacturing unit in Taupo and a marketing operation in the United States. Chairman Tony Gibbs said Tenon was essentially a US-based company and needed its chief executive where its market was.

Eglinton, who takes the reins in October, will be based in Maryland.