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Auckland Airport proposes compromise to directors' fee hike

Friday 22nd October 2010

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Auckland International Airport will compromise on its bid to boost directors’ fees after activist shareholders said it would oppose the increase.

The airport’s board will split the 12.2% boost to the pool for directors’ pay packets over two years, which would effectively see director fees increase 6.1% in 2011 and 2012, the company said in a statement. This will bring total directors’ fees per annum to $1,150,000 at the end of the 2012 financial year. Shareholders will vote on the proposal on October 28 at the company’s annual meeting.

The shares were unchanged at $2.09 on the NZX today, and have gained 3.8% this year.

Earlier this month New Zealand Shareholders' Association said it would oppose the increase on the grounds that it did not match the company’s financial performance, with net profit for the year down 28% on the previous period to $29.7 million.

Auckland Airport said earnings before interest, tax, depreciation and amortisation was a more realistic measure of performance, with EBITDA for the year up 28% to $276.3 million. It also said directors’ fees have been on hold since 2007.

The new allocation reflects a compound annual increase of 2.3% per annum from 2007, versus an inflation rate of 2.7% over the same period, the airline said.

The split will also apply to what percentage of the fee will be payable in shares, which was originally set at 15%. Under the new proposal 7.5% of base directors’ fees will be payable in company stock in the first year and the full 15% in the second.

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