Sharechat Logo

Incentive schemes overdone

By Campbell McIlroy

Friday 4th August 2000

Text too small?
Institutional investor Axa New Zealand is taking issue with claims by Mainfreight that institutions failed to do their homework on its employee share purchase scheme which was accepted despite objections at its annual meeting last week.

Axa chief investment officer Barry Lindsay said the company was supportive of employee share schemes, if appropriately structured, and acknowledged the benefit to shareholders from the likely extra commitment of employees who were owners of the business as well.

But diluting existing shareholders' interests as a result of unnecessarily generous employee share issue terms was not something Axa and other institutions could support, he said.

Last Thursday proxy votes from institutions owning five million shares (approximately 7% of the shares on issue) voted against the resolution at Mainfreight's annual meeting.

In particular, Mr Lindsay said the company questioned the need to offer shares to employees at 30% discount, funded by interest-free loans.

The 2% of capital to be issued in this instance was on top of the 4.2% of the company's capital which had already been issued on favoured terms within the past five years.

Mr Lindsay said Axa had suggested to Mainfreight a smaller discount be applied to the proposed share issue.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report