SP AusNet has defended a 60 per cent jump in annual remuneration for its managing director, despite a fall in the company's security price and profit over its fiscal 2009 year.
Stapled security holders gathered on Wednesday for the company's annual general meeting (AGM) in Melbourne to vote on its remuneration report and other resolutions and to hear a yearly update from its key executives.
The chairman of SP AusNet's remuneration committee, Dr George Lefroy told the meeting he was aware of investor concerns about the plan to increase managing director Nino Ficca's annual remuneration.
"I would like to acknowledge security holder and community concern and interest in executive remuneration particularly in these challenging times," Dr Lefroy said.
There was an outcry in May when SP AusNet, which run's Victoria's high-voltage electricity transmission network, said it would award Mr Ficca a $412,461 cash bonus, despite the utility posting a 6.7 per cent dip in its fiscal 2009 net profit.
Dr Lefroy told shareholders on Wednesday Mr Ficca had been rewarded for "operational excellence" and the role he played in developing business strategy and "guiding and driving specified business outcomes".
He said Mr Ficca's total reportable remuneration for fiscal 2009 had risen by 60 per cent to $2.4 million, from $1.5 million in fiscal 2008.
"The key reason for this increase is due to the long term incentive plan," Dr Lefroy said.
He stressed that the reportable remuneration was not the same as take-home pay because it took into consideration accounting valuations for current and historical equity grants that may or may not materialise.
The managing director's remuneration package for fiscal 2009 included fixed remuneration of $802,000 an on-target short-term incentive of $401,000 in cash, and a maximum long-term incentive payment of around $750,000 which he must convert on-market into securities.
Dr Lefroy said a review in May 2008 found there needed to be a correction in directors' fees and the salaries of the managing director and other executives in order for it to remain competitive with the market.
The remuneration jump for Mr Ficca comes despite the company's stapled securities price falling to 88.6 cents at the end of its fiscal year on March 31, from $1.20 a year previously. SP AusNet shares fell 0.5 cents to 77 cents on Wednesday.
Mr Ficca told the meeting his company report card for the year had included a number of positive achievements.
He cited the net profit result, the connection of 26,400 new customers, the refurbishment and upgrade of key transmission stations and a high level of customer satisfaction as among the year's highlights.
Security holders later voted in favour of the company's remuneration report.
AST Price at posting:
75.0¢ Sentiment: Sell Disclosure: Not Held
