Historic vote at Tower meeting

The annual meeting of insurer Tower in Auckland today is "historic", says the Shareholders Association - marking the first time a New Zealand company's board has supported a shareholder resolution.

The resolution - to approve the millions of dollars overpaid to company directors over a period of four years - is expected to "fly home" at the meeting at the Ellerslie Convention Centre in Auckland.

Shareholders have waited since last year's annual meeting to readdress ratifying the overpayments made during the years from the financial services company's listing until the 2002 financial year.

Director of advocacy for the Shareholders Association Ross Dillon, who anticipates speaking to the resolution, said the association wanted to make a point.

"It's not something a shareholder should ever have to have brought before the meeting. The directors should have done it last year, and that is the actual matter of concern," he said.

"It's the first time the board has supported a shareholder resolution - so it's historic."

The proposal was put forward by an Auckland investor after an NZX Market Surveillance Panel ruling in June 2003 which held that Tower breached listing rules by paying its directors more than the amount approved by shareholders.

The payments fell between the 2000-2003 financial years and were disclosed in the company's annual reports. Most of the directors who received the payments are no longer on the board.

Although the panel did not require the payments to be ratified, it suggested the board put this to shareholders.

Dillon said the company had the opportunity to do this at last year's AGM but declined.

The board has recommended shareholders vote in favour of Burtenshaw's proposal so the matter can be finally disposed of.

However, if it is not approved, Tower does not intend taking action to recover the unauthorised payments from the recipients.

It is believed those directors have a number of good defences to any claim for their return.

Two additional shareholder resolutions to amend the company's constitution are also due to be presented at the meeting, although these do not have the support of the board.

One seeks to make shareholder approval a requirement for granting options packages to directors and employees.

The second seeks to extend rules prohibiting a holder of an undirected proxy from voting in favour of their own election to the board to cover re-election.