KEY POINTS:
Institute of Directors chief executive Nicki Crauford warns that the perceived independence of the New Zealand exchange as a sharemarket regulator could be damaged by chief executive Mark Weldon holding a significant slice of the company.
Crauford is the latest critic of the NZX bonus scheme for Weldon, which could see him take his 5.3 per cent stake of the exchange to 9.9 per cent, worth $20 million at today's NZX market capitalisation.
The institute CEO raised concerns about the NZX - which also functions as the stock market regulator - being significantly owned by Weldon.
"Is it desirable that a likelihood exist for a market regulator to be owned or materially influenced by a private individual, much less its CEO? CEOs of regulators can be dismissed. Owners of regulators cannot," Crauford wrote in an opinion piece for the Herald's website.
"As a market regulator NZX must take the utmost care to set an exemplary standard of conformance with regulation and good governance practices."
Currently the NZX is protected from takeover by a 10 per cent cap on a single shareholder. But should that change, Crauford warns that Weldon would be in a position to block any takeover bid.
"This would certainly endow Mr Weldon with great influence under current takeover legislation," Crauford wrote.
Her views echo those expressed by Shareholders Association chairman Bruce Sheppard this week.
Sheppard said the NZX "sits as effectively a lightning rod that other companies watch in terms of leadership, and executive reward and governance. It should be a best practice operator".
Weldon would have to pay for the bonus shares, at their average price in the days leading up to June 4 this year, when the scheme started.
