AIR - Air NZ.

**Raz** · 03-03-2017, 02:42 PM

Originally Posted by Roger

The fancy pants title probably came with a further pay rise

Yes he misses the divvy and average sale price was $2.31 so maybe not quite such good timing this time.
Yes they seemed to pick the right time to sell last time, (management in general). A series of these announcements would be a little disconcerting but as I am holding a core portfolio position primarily for long term dividend income I am happy to ride the aircoaster long term with seatbelt firmly fastened, tray table folded away and motion sickness pills on standby

You know a string of announcements will follow at some point as they enable a culture to cash out regardless of the reason. It just creates a lot more uncertainty to the market which works against investors. It certainly is a negative point in my view to AIR.

**vin** · 03-03-2017, 03:26 PM

Agreed, there will be a significant portion of traders that had been burnt over the last while.. I think it'll be a slow process to get back to the $3 stage.

**Beagle** · 03-03-2017, 03:47 PM

Originally Posted by Raz

You know a string of announcements will follow at some point as they enable a culture to cash out regardless of the reason. It just creates a lot more uncertainty to the market which works against investors. It certainly is a negative point in my view to AIR.

Agreed. To be fair, (and I know we've discussed this before), looking from the top, Chris Luxon's base salary at around $1.5m Kiwi, (going off memory) is pretty modest for a company of that size with 11,000 employees so senior management's remuneration package is deliberately designed to be incentive based depending upon the financial performance of the company so to quite a degree their interests are indeed aligned with shareholders. The other point is would you invest most of your money in the same company that employs you if you were in their shoes ?

**Raz** · 03-03-2017, 08:02 PM

Originally Posted by Roger

Agreed. To be fair, (and I know we've discussed this before), looking from the top, Chris Luxon's base salary at around $1.5m Kiwi, (going off memory) is pretty modest for a company of that size with 11,000 employees so senior management's remuneration package is deliberately designed to be incentive based depending upon the financial performance of the company so to quite a degree their interests are indeed aligned with shareholders. The other point is would you invest most of your money in the same company that employs you if you were in their shoes ?

When I was in executive role in the US we had heavy internal cultural pressure not to sell and no one really did unless it was an extreme personal situation...same deal with a few boards been on the AIM secondary market in the UK. I can think of only one occasion that did occur and he talked to the CEO who in turn talked to the Board before it happened. Still base salaries were higher as you mention, 1.5 million hardly gets you anything substantial in executive roles. In the fortune 500 company it was the market perception while with the others it was the same however also a lot less liquid market, with a company on the up..why sell.

Having said that Air NZ is not internationally a big company with a lack of volume on shares and overall shareholding movement. Personally their remuneration policy seems a little out of balance and although not intended last year a few sell offs by executives of approx. 400k shares was substantial in relation to daily volume and personally believe had a disproportionate effect on the market at a key pivot point in price. Hardly aligned with investors.

Have a great weekend..feel for me I have to spend in it all in Auckland -)

**winner69** · 03-03-2017, 08:39 PM

Originally Posted by Roger

Agreed. To be fair, (and I know we've discussed this before), looking from the top, Chris Luxon's base salary at around $1.5m Kiwi, (going off memory) is pretty modest for a company of that size with 11,000 employees so senior management's remuneration package is deliberately designed to be incentive based depending upon the financial performance of the company so to quite a degree their interests are indeed aligned with shareholders. The other point is would you invest most of your money in the same company that employs you if you were in their shoes ?

Annual Report has Chris's 2016 total remuneration at $4.7m of which $1.5m in performance rights remain at risk

The leadership team share ot about $16m between themselves

**Beagle** · 04-03-2017, 07:49 PM

Base salary $1.47m, short term incentive $1.6m, (who can complain when they made $800m before tax in 2016), and the $1.5m in performance rights.
He had the conviction of his beliefs to stand up to the other directors and CEO of Virgin and returned 25 cents per share of capital to shareholders, money that would otherwise be invested in a non performing pup.
I'd say he well and truly earned his keep in 2016.