Income outcome caringly clarified
THE listed property sector continued to show its compassionate side yesterday when the chief executive of yet another property trust agreed to make a few sacrifices in order to share some of the pain with his investors. DEXUS Property Group followed the lead of Mirvac and Stockland when it announced a new executive remuneration framework that "promotes greater clarity and alignment between executive pay outcomes and the interests of security holders".
The new scheme will see DEXUS's chief executive (and ex-Stocklander) Darren Steinberg have his $1.4 million base wage frozen over 2013.
This contrasts with the $1.55 million in base pay Steinberg's predecessor Victor Hoog Antick received last financial year.
DEXUS also said it would scuttle its performance payment plan and reconfigure its short and long-term option plans. The review comes after a revolt at the group's annual meeting last year when 28 per cent of shareholders voted against the remuneration report and Hoog Antick's $3.95 million package.
Despite DEXUS shares more than halving since the listed property crash of 2007, Hoog Antick's total pay ended up being more than double the $1.75 million he received in the 2006 financial year.
Rises and falls
Another company property investors are keen to see some compassion from is Aspen Group, which fended off an attempted board spill last year.
The company issued a profit downgrade and a $95 million asset writedown on Tuesday.
Aspen's managing director Gavin Hawkins was paid $1.66 million last year, including $973,000 base pay and $544,000 cash bonus. Not bad for a company worth just $200 million on the share market and whose shares are down 88 per cent from a 2007 peak.
FKP chief executive Peter "The Incredible Hulk" Brown might also be wondering if it is time to make some sacrifices.
Brown has seen his fixed pay jump from $400,000 to $1.5 million a year since 2003. FKP's share price is down more than 90 per cent from its 2007 high.
Shades of grey
The former NSW Liberal leader John Brogden, who retired from Parliament in 2005, provided some constructive tips yesterday on when people should be able to access their retirement savings.
"The time has come to consider whether the superannuation preservation age of 60 is still appropriate," the now chief executive of the Financial Services Council told the group's annual conference yesterday.
Brogden argued the seven-year gap between the preservation age and retirement age of 67 could "accelerate consumption of superannuation before retirees become eligible for the age pension".
"Increasing the preservation age will also deliver higher economic growth by driving higher labour force participation of older workers," said Brogden, who was able to access his parliamentary pension at the ripe old age of 36.
A FSC spokesman was unable to provide details of Brogden's parliamentary retirement benefits but confirmed he did not take it as a lump sum.
Antsy Packer
Former One.Tel director James Packer provided a formal response yesterday to a report in the Herald regarding his plans on his Crown Limited's shareholding in the owner of Sydney's Star casino.
"I have no arrangements with K.T. Lim," Packer said in response to the report, which said Crown could try to gain majority control of Echo Entertainment in concert with the Malaysian billionaire's Genting business which also has a stake.
"And the pissants from The Sydney Morning Herald writing more of the crap that they have written for more than 10 years - which is why the Herald is going down the tube - doesn't surprise me," reasoned Packer in The Australian newspaper.
But CBD does not take it too personally, given Packer has said even harsher things about himself in the past. "I may be a f---wit but I am not a liar. I was a believer," he said in 2005, after he provided evidence in the corporate regulator's failed case against former One.Tel managing director Jodee Rich.
Packer, however, has proved to be an optimist on Fairfax. When he labelled Fairfax as "the worst run company in Australia" in a 2002 report, also in the News Limited papers, he was bullish on the company's share price.
"They have got no strategy and my belief is their shares are going to hit $2.50 before they hit $4," he said.
Fairfax Media's share price closed at 51 cents yesterday.
Got a tip? srochfort@fairfax.com.au
Frequently Asked Questions about this Article…
What changes did DEXUS Property Group make to executive pay and why should investors care?
DEXUS announced a new executive remuneration framework that freezes CEO Darren Steinberg's $1.4 million base wage over 2013, scraps its performance payment plan and reconfigures short- and long-term option plans. The moves follow shareholder pressure and mirror earlier actions by Mirvac and Stockland — investors should note the company is trying to align pay with security holder interests after a revolt over previous executive packages.
How serious was the shareholder revolt at DEXUS and what prompted it?
About 28% of shareholders voted against DEXUS's remuneration report and the $3.95 million package awarded to former CEO Victor Hoog Antick at the prior annual meeting. That backlash prompted a review of pay structures, leading to the new framework and pay freezes to address investor concerns about executive rewards amid poor share performance.
What did the article say about Aspen Group’s recent financial hit and executive pay?
Aspen Group issued a profit downgrade and announced a $95 million asset writedown. Despite those setbacks — and shares down 88% from a 2007 peak — managing director Gavin Hawkins was paid $1.66 million last year, which included $973,000 in base pay and a $544,000 cash bonus. The company is valued at about $200 million on the share market, according to the article.
How does FKP’s CEO pay compare with its share performance?
FKP chief executive Peter Brown's fixed pay rose from $400,000 to $1.5 million a year since 2003, while FKP's share price is down more than 90% from its 2007 high. The article highlights the contrast between rising executive pay and sharply falling share prices in some property companies.
What broader theme about the listed property sector is highlighted in the article?
The article points out a trend in the listed property sector where several trusts and developers (including DEXUS, Mirvac and Stockland) are revising executive remuneration to be more aligned with investor interests. This reflects pressure on management to share the pain after significant share price falls since the 2007 property crash.
What did John Brogden suggest about the superannuation preservation age and why does it matter for investors?
John Brogden suggested reconsidering whether the superannuation preservation age of 60 remains appropriate, noting a seven-year gap to the retirement age of 67 may encourage earlier drawing down of super before eligibility for the age pension. He argued increasing the preservation age could boost economic growth by encouraging older workers to stay in the labour force — a policy point investors may watch for its potential impact on retirement savings and consumer behaviour.
What was James Packer’s response to reports about Crown, Echo Entertainment and K.T. Lim?
James Packer formally denied having any arrangements with K.T. Lim related to Crown's shareholding in Echo Entertainment. He also publicly dismissed reporting in The Sydney Morning Herald and repeated colourful comments he has made in the past about journalists and companies, as noted in the article.
What does the article say about Fairfax Media’s share price and Packer’s past comments?
The article notes James Packer previously criticised Fairfax Media as poorly run and predicted a low share price, and it reports Fairfax Media’s share price closed at 51 cents on the day referenced. This detail is presented in the context of Packer’s past public statements about the company.
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