Fletcher rewards former chief

By PAM GRAHAM

Fletcher Challenge Forests paid chief executive Terry McFadgen $750,000 for previous years of services to the Fletcher Challenge Group when he retired this year, says the annual report.

The forestry company is promising to slash head office costs when it slims down even more by selling its forests to focus on processing wood.

Fletcher Forests' spokesman Paul Gillard said the payment to McFadgen was part of his contract with Fletcher Challenge.

McFadgen, who retired as chief executive on March 31, received a base salary of $566,138, in the year to June 30, 2003, a bonus of $83,437, a payment of accumulated annual and long-service leave of $119,563 and the $750,000 payment for prior years of service.

He also received a $260,000 bonus in September 2002 for the year to June 30, 2002, which had previously been disclosed. Fletcher Forests employed 97 people with an income of more than $100,000 this year.

"This company keeps coming up with inventive way of confusing and annoying long-suffering shareholders," said Bruce Sheppard of the New Zealand Shareholders Associations. He said the company was an innovator in the area of executive pay.

Still, the report revealed a heavy work rate by the board. The full board met 27 times in the year to June 30, which is one more than the 26 disclosed by Tranz Rail in its annual report this week.

There were also 19 other meetings of board committees.

"From the end of this year, Fletcher Challenge Forests will become a new lean company, focused on marketing, distribution and manufacture of high-quality wood products," the report said. "The board is very confident that the reformed company will be successful, profitable and a key contributor in the maturing New Zealand radiata pine industry."

Fletcher Forests is evaluating the $685 million bid for its forests from The Campbell Group and a $725 million bid from Kiwi Forests Group, which includes New Zealand businessmen and US timber management company Prudential Timber Investments.