Thursday 22nd August 2019
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The New Zealand Shareholders’ Association says it will vote any proxies it holds against Stride Property and Stride Investment Management’s proposal to increase directors’ fees.
The Stride companies, which are stapled securities quoted on NZX under a single ticker, SPG, are proposing to increase directors’ fees by $45,000 to $805,000.
“The current fees are at or about the 75th percentile of the comparator companies whereas SPG’s metrics are closer to the 25th percentile,” NZSA says in advice to members on its voting intentions.
“Therefore, the current fees are more than those being paid to directors of comparable or larger-sized companies,” it says.
“We do not see any justification for a fee increase at this time.”
Stride’s notice of meeting – the AGM will be held on Aug. 29 in Auckland – says the board last reviewed directors’ fees in 2017 and that it engaged Ernst & Young to provide independent advice. Stride has provided a summary of that advice on its website.
The board “is conscious of its obligation to ensure directors’ fees are set and managed in a manner which is fair, flexible and transparent,” the notice says.
At the same time, the Stride board “seeks to ensure that the directors’ fees are set at an appropriate level to assist Stride Property Group to secure and maintain the skills and experience at board level necessary to govern the business and enhance the long-term value of Stride Property Group for shareholders.”
The table provided in the notice shows the board wants to increase the chair’s fees by 8.1 percent to $167,500, to increase non-executive directors’ fees by 6.7 percent to $96,000 and the chair of the audit and risk committee’s fees by 30 percent to $13,000.
It is also proposing to reduce the allowance for additional work and attendance by 0.3 percent to $144,500.
The EY report compared Stride with all the other listed property companies, several of the retirement village and aged care companies, NZX and Kingfish. It found Stride fell between the 25th percentile and the median by market capitalisation – Stride’s was $745 million while Kiwi Property Group was $1.94 billion – and below the 25th percentile by total assets – Stride's was $1 billion while Kiwi’s was $3.09 billion.
Stride ranked ninth of the 14 comparator companies by revenue and market capitalisation and 11th by total assets.
Nevertheless, EY recommended the fee increases Stride is asking shareholders to approve.
Stride shares are trading at $2.33 and have risen about 23 percent in the last 12 months.
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