Fletcher Building board underpaid: PWC

Fletcher building chairman Ralph Waters is paid $337,500. Photo / Dean Purcell

Fletcher Building Ltd's seven non-executive directors are broadly underpaid compared to their peers in Australasian companies and are asking shareholders to approve a 25 per cent lift in their pool of fees.

The maximum available remuneration for non-executive directors would be increased by $500,000 to $2 million a year, the first increase since 2006, according to the company's notice of meeting for the November 16 AGM in Auckland.

The increase doesn't apply to managing director Jonathan Ling.

Fletcher commissioned PricewaterhouseCoopers to provide an independent assessment of directors' fees. The base fee at the company is $143,500 a year compared to $152,000 at similar firms, Fletcher cites the report as saying.

Fletcher chairman Ralph Waters is paid $337,500 while the average chairman's pay in the survey was $439,000, the report says.

Directors on the audit and risk committee were paid an additional $23,000 - higher than the $20,000 paid to their peers, while the chair of the remuneration committee got $26,500 (compared to $26,000) and members of that committee got $17,500 while their peers received $13,000.

The proposed fee hike comes two weeks after Fletcher forecast a 10 per cent drop in first-half profit and said full-year earnings growth would stall in the face of weak residential construction in Australia and New Zealand.

The shares have shed 19 per cent of their value since the Oct. 12 profit warning, toppling Fletcher from its position as largest company on the NZX 50 Index. The stock is still rated 'outperform' based on a Reuters poll, though within the range are six 'hold' recommendations.

Directors' fees have come in for scrutiny and some criticism during this round of annual meetings. Yesterday, specialty chemicals maker Nuplex Industries withdrew a proposal to hike directors' fees by about a third after concerns from shareholders about the scope of what would have been the first the increase since 2007.

SkyCity Entertainment, Freightways, Hellaby and Skellerup are also proposing higher fees for directors.

Fletcher's notice of meeting today says its policy of directors' pay takes into account the importance of Australia to the business, with that country being "the principal market for acquisition opportunities" and home to its ASX listing.

The proposed increase leaves its board "conservatively placed against comparable Australasian companies" and is appropriate for a company of Fletcher's size, complexity and international orientation, it said.

Shares of Fletcher fell 0.3 per cent to $6.34 yesterday.