Pyne Gould execs offered bonus shares

Jeff Greenslade Photo / Herald On Sunday

Pyne Gould executives have been rewarded with 4.4 million new shares in the company as a thank-you for the merger of the firm's Marac unit with Southern Cross and Canterbury building societies.

The managers are getting shares equivalent to 0.5 per cent of the company, at 36.74 cents each, worth $1.6 million, according to a statement from chairman Bruce Irvine.

The gratuity will slice $1.4 million off Pyne Gould's 2011 profit and cut $300,000 from the earnings of the new merged entity, Building Society Holdings this year and by $100,000 in 2012, it said today.

Half of the shares will immediately be issued to eligible staff, with the remainder held in escrow until October 1, when the balance will be released in three monthly tranches, provided the executives are still with the company.

"The plan closely aligns the interests of senior management with those of PGC and its shareholders," Irvine said.

"It also provides an incentive for them to be a part of its future development and growth.

Pyne Gould paid eight executives more than $300,000 in the 12 months ended June 30, with the top salary going to managing director Jeff Greenslade's, at $1.1 million, according to the annual report.

Greenslade, who will be CEO of the new company, had some 913,000 shares in Pyne Gould as at June 30.

The shares were unchanged at 36 cents, having fallen 21 per cent through 2010.

The merger was completed earlier this month, with a listing of BHSL shares on the NZX flagged for the end of the month.

The merged lender, which has some $2.2 billion of assets, is aiming to secure a banking licence, and achieved the minimum required credit rating when Standard & Poor's upgraded it to a BBB-.

The deal is the biggest consolidation in the finance sector from a turbulent period over the past four years, with dozens of finance companies hitting the wall as property developers failed to repay outstanding loans.

Pyne Gould still hasn't decided the future of its funds management unit, Perpetual Group, which includes cornerstone shareholder George Kerr's distressed asset vehicle Torchlight Management Ltd. Kerr, who owns about 13 per cent of the company, was left out of the mix in the merger and isn't on the board of the new entity.