Fewer deals so GPG bonuses go

Tony Gibbs' pay was cut by 70 per cent last year because of the loss of the bonus. Picture / Glenn Jeffrey

Guinness Peat Group directors missed out on a bonus last year, the company's latest annual report shows.

That is no laughing matter when you are Tony Gibbs, GPG's New Zealand-based director, and last year's bonus was £1 million - worth more than $2.6 million at today's exchange rate.

The report shows that losing the bonus cut Gibbs' pay by 70 per cent last year, from just under £1.4 million in 2003 ($3.69 million) to £418,606 this year ($1.1 million).

GPG directors get a bonus if shareholders get a 12.5 per cent realised return on shareholder funds - and with net profit down to £25.3 million from £64 million, they didn't. The company's results depend on the timing of deals, and fewer deals were done last year, with some asset sales falling into 2005.

"Our profits can be lumpy because deals happen when deals happen," said Gibbs. "You can only have bonuses when you've earned the money." The latest figures mean Gibbs - the best paid executive in New Zealand in 2003 - lost that title to Telecom chief executive Theresa Gattung, who earned $2.8 million in cash, benefits and bonuses.

Westpac boss Ann Sherry was the runner-up at $2.6 million - with Fonterra boss Andrew Ferrier's package expected to be about $2 million.

The report shows Gibbs' base salary rose to £418,606 from £396,188, but that was because of the exchange rate. His actual salary, paid in New Zealand dollars, was unchanged at just over $1 million. But he did make a further £652,719 from cashing in 10-year-old options which would otherwise have expired.

He was also awarded 1.32 million new options with an exercise price of 69.91p a share - already in the money, with GPG's share price at 71.5p on the London exchange.

Gibbs' profit on options paled in comparison with the £2.2 million for Sir Ron Brierley, who does not receive any salary for chairman, and the £2 million for Australian-based director Gary Weiss.

While the rewards reaped by GPG executives have drawn criticism in the past, many institutional investors remain supportive.

"They're working for an international company and should be paid international salaries for the returns they're generating - which have been fantastic," one fund manager said.