Feltex options 'example of corporate largesse'

By PAUL PANCKHURST

Shareholders Association chairman Bruce Sheppard has attacked share option plans for Feltex Carpets executives as an unacceptable flashback to 1990s corporate largesse.

Feltex is floating in an initial public offering that will raise $243 million to $271 million. The pricing of the issue will be revealed on Monday after a three-day "book build".

The issue prospectus disclosed two executive share option plans.

"A" is for the chief executive, chief operating officer and chief financial officer, and "B" is for other senior managers.

As part of the float, 7.25 million options will be granted, with another 725,000 possibly to follow. Each can later be used to buy one share.

In the more generous plan "A", the initial exercise price per share is determined by the pricing of the IPO.

The price is reduced during the term of the plan by the value of dividends paid out by the company.

Sheppard's key objection is an absence of performance hurdles.

"They are 1990s mega-options on steroids, by New Zealand standards."

A Feltex spokesman said everything had been fully disclosed and investors were able to make their own decision.