The New Zealand Shareholders Association has welcomed yesterday’s announcement by Abano that its directors will be taking half of their after tax fees in the form of Abano shares for at least the next three years.
Chairman John Hawkins said the Abano policy aligned the director’s interests with those of ordinary shareholders and was an encouraging development that the Association hoped would be taken up by more companies. There are a few at present, but we would like to see this as the norm, he said, noting that companies doing so would meet NZX corporate governance best practice code.
In particular, we like the way the Abano deal has
been structured along the lines promoted by the NZSA. With the shares being purchased on market there will be no dilution effect, and the proposal to buy smaller amounts several times during the year will avoid artificial market price movements said Hawkins. Obviously the Abano
directors will have to ensure the company performs to obtain value from this decision, so we think it demonstrates both their confidence and commitment to the future of the company he said.
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