Originally Posted by
Snoopy
Like you ronaldson, I don't begrudge the directors some increase. But I will also be voting 'NO'.
The particular bit I didn't like in the 'Strategic pay' report was on page 10.
"Strategic Pay Limited's annual NZ Directors Fees Survey of February 2023 continues to indicate that between 25% and 40% of larger commercial companies pay separate committee fees (Among large Australian companies this is the norm). We support this unbundling practice as a means of tracking and rewarding actual workload and responsibilities and providing greater accountability and transparency."
This sounds like Strategic is thinking of directors as 'employees' of the company. They are not. They independent professionals who are already being paid very handsomely for their contracting work putting their wide work history experience to use in governance matters. If they don't like their pay rate they can leave (curiously in my decades of following the market, I cannot recall a single director leaving any board for that reason).
Australia is a different environment where the highly paid are on higher tax rates than in NZ (45% for incomes of $180k or more, vs 39% for NZ). So we could argue that Australia is just 'equalising' for that. Nevertheless, I am happy for NZ companies to use Australian directors fees as a reference for pay rates, provided they do the same for their own company workers within NZ (which I think puts an end to that argument).
Unless things go very wrong, a governance roll is normally ticking boxes that have already been filled in by other professionals who have already been highly paid in their own right. IMV, governance should be about 'the big picture', not shuffling through the minutiae of business deals on a 'paid per hour' basis. Let the employees of the business do that job.
I notice the StrateicPay review also said on p12:
"Finally since our recommendation involves large percentage increases, you may choose to stage the increases over two years rather than adopting the full adjustments immediately."
The board seems to have gone tone deaf on that suggestion.
SNOOPY