Sanford and NZSA reach compromise

NZSA

Thursday 19th January 2012

Following constructive discussions with Sanford Chairman Jeff Todd and MD Eric Barratt, the Chairman of the NZ Shareholders Association, John Hawkins said agreement had been reached on changes to the company’s proposed director fee increase.

The issue had arisen as a result of shareholder dissatisfaction with Sanford’s performance since the last adjustment in 2008. The company was seeking an increase from $442500 to $550,000 (after adjusting for the extra board member recently appointed). Hawkins said that the company would limit the amount actually paid to $500k with the balance being available next financial year subject to a lift in performance.

It is important that the company can pay sufficient to attract quality directors with the skills to contribute to the strategic review that is ongoing, Hawkins said.

The NZSA accepted that current fees were too low, but it was important that director’s fees were related to performance and not out of line with returns to shareholders. We believe the compromise we have reached balances those requirements, Hawkins said.

Hawkins said the company had also clarified a number of issues around the size and composition of the board and the Associations was satisfied that an ongoing renewal process is now in place. The company has also agreed to look at the timing of the release of AGM documentation. With a September balance date, investors receive documents very close to Christmas. Although legal constraints limited the options, we were encouraged by the company’s willingness to address this and the other issues we raised, he said.

As a result, Hawkins said the Shareholders Association would be voting undirected proxies it holds in favour of the motion to increase directors fees at the company’s AGM next Wednesday.

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