The NZ Shareholders Association said today that ex gratia payment of $3m to Tim Miles by PGG Wrightson continues the company’s pattern of overpaying a select few at the expense of many.

Chairman John Hawkins said the first mistake was the contract written for Mr Miles under which he was paid over $1.6m, while the next man down was paid only $680,000. Hawkins said the NZSA believes the salary of the CEO should always be related to the salary structure of the rest of the organisation. Good results are turned in by a team, not just a good CEO he said.

In this year’s annual report, Tim Miles salary was $$615,410 plus a $703,125 short term incentive. Hawkins said that given the company’s recent performance, it was hard to see how such a large short term incentive could be justified. Mr Miles was also previously granted 2.5m shares paid for by an interest free loan from the company and vesting over

several years as part of a long term incentive scheme. When Mr Miles resigned, the company acquired online pharmacy no prescription and cancelled the long term incentive shares.

Hawkins said that the $3m was described as an ex gracia payment, something that would normally be considered a voluntary payment rather than a contractual obligation. Hawkins speculated that PGW was probably forced into a buyout of Mr Miles contract because the company had changed – without the Uruguay farms, the finance company, and with the new majority shareholder Agria. He said with major operating divisions dispersed, Mr Miles may have been deemed redundant, adding that the very large ex gracia payment hardly seems fair to shareholders since Mr Miles was part of the management team that created the problems faced by PGG Wrightson. With the share price languishing around 40c, Hawkins said the market was demonstrating little confidence that the company had turned the corner.

The Shareholders Association hoped that the current Managing Director George Gould, who sold his related party shares to Agria, and who has a long experience in the farming sector, will accept a salary more closely related to those of his management team. He needs to correct not only the salary excesses, but also the problem of high debt and unrealistic investments that have dogged the company in order to restore it as the backbone of rural trading in New Zealand said Hawkins.

John Hawkins

Chairman

Ph 021 640 588

The New Zealand Shareholders Association Chairman John Hawkins said today that the NZSA was concerned that many Telecom bondholders may not realise how important it is that they participate in the upcoming demerger vote.

A bondholders meeting

will be held in Auckland on Friday, September 30th. This is a month before the Telecom shareholders will consider the demerger. It looks to have slipped under the radar, but is every bit as important, said Hawkins. If bondholders do not approve the demerger arrangements it is likely that the whole scheme could collapse.

The Shareholders Association has already criticised the length of the required documentation. Hawkins said that to aid retail investors, the NZSA now had a three page summary of the key issues bond holders needed to consider up on its website www.nzshareholders.co.nz . We think that many investors will find the 80 page official documentation too difficult and repetitious, said Hawkins. Hawkins said the NZSA was also working on a similar summary for shareholders, but with over 500 pages to wade through, this was still a few days from being completed.

The New Zealand Shareholders Association is offering its usual proxy service to all bond holders. They only need to put our name on the proxy form, sign it and send it to Computershare. We will take care of the rest, he said. Computershare must receive proxy forms by 10am on Wednesday 28^th September.

Hawkins said the Shareholders Association intended to vote undirected proxies in favour of the proposal because it believed on balance, it was in bond holder’s

best interests.

John Hawkins

Chairman

Ph 021 640 588

The New Zealand Shareholders Association says the size of the documentation required to be distributed to Telecom shareholders informing them of the proposals to split the company in two is ridiculous.

Chairman John Hawkins described the 500 plus page booklet as an extreme example of disclosure gone mad. Hawkins said that he did not blame Telecom for the situation. This has been forced on them by regulatory requirements. The company has satisfied us

that this was the minimum they were legally required to distribute.  That just goes to prove the current law around this issue is an ass, he said.

The Association says that retail shareholders want clear and concise documents that highlight the basic issues.  Hawkins said that the NZSA intended to prepare a short summary for the benefit of their members and

others who would otherwise struggle to wade through the official document. We hope to have this up on our NZShareholders website in the next few days he said.

Hawkins said that fortunately there was light at the end of the tunnel. Upcoming changes to securities regulations would require concise brief documentation for shareholders and an internet based database for the more complex detail. Unfortunately this will not be law until sometime next year he said. The NZSA has been involved in the consultation process and is satisfied with the likely outcome.

In the meantime both shareholders and companies are stuck with huge documents that must be in hard copy. Since the sheer size would put most people off reading it, Hawkins described the huge booklet as an officially sanctioned waste of money and resources.

John Hawkins
Chairman
Ph 021 640 588