TRA - Turners Automotive Group [previously TNR - Turners Limited]

[Snoopy]

Back in 2013 the Chairman's fees were $72k and Directors were $44k, this is for the old Dorchester Pacific which already ran their finance, insurance and debt collection businesses.

So 5 years down the track with the addition of the 'selling cars business' they want a 108% increase for the Chairman and 70.5% for the directors!

Since their last fee raise in 2015 when the Chairman got a 34% increase and Directors 10%, the 3 year return for SH's is just under 6% p.a (given you purchased around the AGM at $2.75). This is most likely a negative return if you have purchased since then at a higher price.

If the "boards focus is on creating shareholder value" then they have failed the last 3 years IMHO. What type of organisation rewards failure with a 36% pay rise?

On top of this, if resolution 5 is passed. Then it is back dated to 1 April 2018!

One thing I did note in the 'fairness' report supporting the new fee structure is that they noted the director fee increase was 'a lot', and suggested it might be phased in over a couple of years. Doing it in one hit and then back dating the increase is hardly in line with the 'support report' the directors commissioned.

The loan business has grown quite a bit over the years with the acquisition of Southern Finance and Oxford Finance. Furthermore with the acquisition of Autosure, the insurance business is mega sized now compared to what it used to be. So I think they have done a bit more than 'just add a car sales division.'

Personally I don't think finance and insurance are easy businesses to understand.

60cm's, (yes 60 cm's !) of fresh powder at Coronet Peak mate...and we're back at work watching the Turners ski slope, life isn't fair is it lol (although some people watch share prices even in the toilet but best I don't tell tails out of school eh lol)

Very disappointed with NZSA approach. Quite obviously they overlooked Colonial Motors comparison with 3 times the annual turnover and the Chairman is happy with a little over half the fee Grant Baker wants. Doesn't he get enough already from his 10% shareholding and dividends for goodness sake. I'll be telling Noodles (who perhaps seems to be representing their interests a bit lately ?), that NZSA needs to think harder about these sort of outrageous fee increases for such a modest sized company. How hard is it really to govern a company that sells used cars with finance and insurance !

I think the increases advised are for the position rather than the current incumbents. Granted (sic) Grant Baker probably doesn't need the money. But at some point (maybe soon?) he won't be Chairman any more. You have to make sure the directors fee pot is big enough to encourage the next Chairman to 'give her all' in the wise governance of this business.

The Colonial Motors comparison is interesting, but really are the Colonial Boys and Girls not just 'box tickers'?:

1/ Rolling out their retail premises in accordance with Ford (and Mazda) NZ's plans. THEN
2/ Advertising for product (taken care of by Ford/Mazda), WHILE
3/ Financing deals for the product (taken care of by Ford/Mazda),
4/ And even getting the model mix in the showroom right(taken care of by Ford/Mazda) .

A lot of what directors do in other companies is all done for them. Perhaps the Colonial directors really do only need to be only on half the pay of those Turners guys?

SNOOPY

[Beagle]

Colonial Motors have trucks too and run a massive number of car servicing operations and develop vehicle sites properly so there's more to it than you suggest and there's three times the turnover. Maybe some car dealers are greedy and others aren't ?

[McGinty]

One thing I did note in the 'fairness' report supporting the new fee structure is that they noted the director fee increase was 'a lot', and suggested it might be phased in over a couple of years. Doing it in one hit and then back dating the increase is hardly in line with the 'support report' the directors commissioned.

The loan business has grown quite a bit over the years with the acquisition of Southern Finance and Oxford Finance. Furthermore with the acquisition of Autosure, the insurance business is mega sized now compared to what it used to be. So I think they have done a bit more than 'just add a car sales division.'

Personally I don't think finance and insurance are easy businesses to understand.

SNOOPY

Thanks for you views there Snoopy, yes you are correct in the most of the businesses are larger than they were back in 2012. One only needs to look at the number of employees receiving over $100k to understand to picture:

2013 - 7 over $100k
2015 - 16 over $100k
2018 - 86 over $100k

The point I was trying to highlight was that the governance around these businesses would most likely be the same (happy to be corrected with this). Judging by the 2018 figure of salaries over $100k, they should have more than enough capable managers within each business who would do all the leg work and report back to the board.

In the absence of the the boards own reasons to justify the increase in existing directors fees (for example increased workload), shareholders are left to come to their own conclusion.

[winner69]

Mcginty ...I think the 2013 and 2015 numbers you quoted are Dorchester employees only

Remember Dorchester effectively took over Turners and the reports you have used for those years are Dorchester reports

Snoops will have the old Turners reports ...he could look up how many Turners employees got >$100k in those years

More and more Employees getting paid more than $100k ...that good?

[McGinty]

Mcginty ...I think the 2013 and 2015 numbers you quoted are Dorchester employees only

Remember Dorchester effectively took over Turners and the reports you have used for those years are Dorchester reports

Snoops will have the old Turners reports ...he could look up how many Turners employees got >$100k in those years

More and more Employees getting paid more than $100k ...that good?

2013 was only DPC, but the 2015 figure was from the joint DPC plus TUA (Newly renamed Turners Limited) as at 31 March 2015. The Takeover was completed Dec 2014.

But you raise a good point so I checked TUA 2013 Annual report (Google search) and the during that year TUA had 39 employees over $100k, helps explain the increase (but not why the 2015 annual report only lists 16 over $100k)

[winner69]

2013 was only DPC, but the 2015 figure was from the joint DPC plus TUA (Newly renamed Turners Limited) as at 31 March 2015. The Takeover was completed Dec 2014.

But you raise a good point so I checked TUA 2013 Annual report (Google search) and the during that year TUA had 39 employees over $100k, helps explain the increase (but not why the 2015 annual report only lists 16 over $100k)

Because Turners employees only worked for the reporting entity being Dorchester (morphed into TRA) for a few months, not long enough to get to $100k for most

Tricky eh

[McGinty]

Because Turners employees only worked for the reporting entity being Dorchester (morphed into TRA) for a few months, not long enough to get to $100k for most

Tricky eh

It sure is, thanks for clearing that up.

The collective wisdom of the community shows it's worth again

[couta1]

Must be Couta reversion Friday, the worm is turning.

[sb9]

Must be Couta reversion Friday, the worm is turning.

$2.80 is proven to be strong support and floor again. Here's hoping we don't re-visit that level again.

[Beagle]

$2.80 is proven to be strong support and floor again. Here's hoping we don't re-visit that level again.

Yes good point.


Couta1 me old mate, I am still very happy to wager a case of cider we don't see $3.80 before 15 September 2019. Just waiting on your confirmation of this "huge" bet lol