SPAusNet – The Australian
SP AusNet boss’s pay leaps 60pc as profit plunges
SINGAPORE-BACKED 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 2008-09.
Stapled security holders gathered yesterday for the company’s annual general meeting in Melbourne to vote on its remuneration report and other resolutions and to hear a yearly update from its key executives.
SP AusNet remuneration committee chairman George Lefroy told the meeting he was aware of investor concerns about the plan to increase managing director Nino Ficcau’s annual pay.
“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 is backed by Singapore Power and runs 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 net profit for this financial year.
Dr Lefroy told shareholders yesterday Mr Ficca had been rewarded for “operational excellence” and the role he played in developing business strategy and “guiding and driving specified business outcomes”.
Mr Ficca’s total reportable remuneration for 2008-09 had risen by 60 per cent to $2.4 million, from $1.5m last financial year, he said. “The key reason for this increase is the long-term incentive plan,” Dr Lefroy said.
He stressed that the reportable remuneration was not the same as take-home pay because it included accounting valuations for current and historical equity grants that may or may not materialise.
The managing director’s remuneration package 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 about $750,000, which he must convert on-market into securities.
Dr Lefroy he said a review in May last year showed a correction was needed in directors’ fees and the salaries of the managing director and other executives, for it to remain competitive.
The remuneration jump for Mr Ficca comes despite the company’s stapled securities price falling to 88.6c at the end of its March year, from $1.20 a year previously. SP AusNet shares fell 0.5c yesterday to 77c. Despite the protests, security holders later voted in favour of the company’s remuneration report.
Mr Ficca told the meeting his company report card for the year had included a number of positive achievements.
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 were among the year’s highlights, he said.
SP AusNet’s power infrastructure was affected by the fatal Victorian bushfires earlier this year. Some Kinglake residents affected by the fires have launched a class action against SP AusNet, alleging faulty power lines started some of the blazes. The firm is defending the claim.