Investors warn on director fee jump

The Shareholders Association has put Auckland Airport on notice as the company made last-minute changes to plans to boost directors' fees.

Yesterday the airport revised plans to bump up its directors' fees by 12.2 per cent, taking the total bill to $1,290,000.

It has proposed the increase be split over two years in response to feedback from shareholders.

Shareholders Association chairman John Hawkins said it was unhappy with Auckland Airport's original proposal.

The backdown was a win for the association after talks with the airport and major shareholders and an "absolute justification of our stance".

"Our view is when the airport shows some real growth and when there is a change from the situation where for the last five years the dividend payable to shareholders has been exactly the same, whereas the fees paid to directors has grown exponentially, then the directors would deserve a reasonable increase."

Hawkins said the association has accepted a compromise in this case, but the airport board is well aware it is under scrutiny.

Auckland Airport's outgoing chairman Tony Frankham was not commenting beyond the company's release to the stock exchange yesterday but is sure to face further questioning from shareholders at its annual meeting this Thursday.

In contrast, the Shareholders Association supported Vector's bid to raise director fees. The board, chaired by Michael Stiassny, put forward a proposal to increase the fees paid to directors by $4950 to $94,500. Stiassny's remuneration would lift $9000 to $189,000.

Hawkins said it supported Vector's directors' fee increases because the company had shown restraint in the past.

In a notice to shareholders before the company's annual shareholder meeting yesterday, Vector said its directors' fees had not risen since the company went public in 2005.

Details of the final shareholder vote were not available last night but proxy voting supported the move by almost two votes to one.

Vector backed down on a proposed fee increase in 2008 that would have seen Stiassny's pay jump $40,000 to $220,000, saying it was no longer appropriate to ask for more money given the state of the local and global economy.

Hawkins said the directors were "in our view doing a pretty good job" and had been up front about what they were doing.

"We think it's important to us to pick on the people who are not being fair and reasonable to their shareholders and praise the ones who are."

Speaking after yesterday's annual shareholder meeting, Stiassny said the company had done well, with shareholders having received an increase in dividend.

"We were seeking a small increase which we hadn't had for a long time."

In the year to June 30, Vector saw revenue grow slightly to $1.19 billion. Net profit after tax (npat) increased 17.3 per cent to $194 million, with underlying npat increasing to $173 million.

Vector lifted its dividend from 13.75c a share last year to 14c.

Stiassny said yesterday it was unhappy with the performance of its 20 per cent shareholding in NZ Windfarms.

Vector shares closed down 1c to $2.36. Auckland Airport shares closed up 2c at $2.11.

twitter.com/HelenTwose