Xero to seek bigger directors fee pool for expanded board, director Elliott to depart

Tuesday 6th June 2017

Xero wants to boost its pool for directors fees 64 percent to cater for an extra two or three directors to guide what's become a much larger software company since the board's pay was last reviewed three years ago.

Shareholders of the Wellington-based company will vote at the July 12 annual meeting in Sydney on whether to approve increasing the fee pool to $1.4 million from $850,000, which Xero's notice of meeting says will let it recruit two to three extra non-executive directors in key markets such as the US or UK. Investors last voted on increasing director pay in 2014, and since then the company's subscriber numbers have more than tripled to 1.04 million and revenue has more than quadrupled to $295.4 million. Xero currently has seven directors.

After comparing Xero's director remuneration with fees in New Zealand, Australia, the US and the UK, “it became apparent that Xero would need to increase the remuneration cap in order to ensure Xero can attract and retain non-executive directors with the appropriate knowledge and experience relevant to growing global technology platforms, wherever these directors may be located in the world,” the notice said. "This is seen as particularly important as Xero moves into the next stage of its growth and forges ahead on its journey toward NZ$1 billion in revenue and beyond."

Xero also signalled director Craig Elliott won't seek re-election at next month's meeting after five years on the company's board. Elliott joined the board in 2012 when the New Zealand software firm was considering a secondary listing on the Australian Securities Exchange. Elliott co-founded cloud-network software firm Pertino Networks and now advises Kiwi tech firms.

Analysts predict Xero will post a maiden profit in 2019 after crossing the 1 million subscriber mark last year. It posted a smaller loss in the year ended March 31 and stemmed the operational cash outflow to just $4.4 million.

Shareholders will also vote on electing Susan Peterson and re-electing Lee Hatton to the board at the meeting.

Xero shares rose 1.5 percent to $25.88, having gained 46 percent so far this year.

(BusinessDesk)

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