CBD
Spooky goings on at CSL, where phantom shares seem to be incoming chief executive Paul Perreault's best - or at least most lucrative - friend.
While you can't get blood from a stone, you can certainly wring money from blood plasma, if CSL is any guide.
And why should shareholders drink up all of that cash? The new boss of the $26.7 billion blood plasma and vaccine behemoth looks set to drink some rich drippings from the bottom line.
All he has to do is last a year - surely no problem for the mysterious American.
From details of Perreault's pay arrangements, revealed to the ASX on Friday, CBD has worked out that Perreault is set to receive up to $5.3 million a year. Or possibly more, if CSL's star continues to shine.
There is a flat $US1.7 million a year cash salary, plus up to the same amount as a bonus. Two-thirds of the bonus is to be paid as cash straight away, with the final third paid in "phantom shares".
The ghostly scrip will be paid as cash after three years, so as long as CSL shares continue their long-term upwards trend there will be a bonus bonus.
On top of that there's a long-term incentive plan under which Perreault can receive up to 120 per cent of his base pay - half of which is again in phantom shares.
Still, there's a long way to climb before Perreault's pay reaches the dizzying heights of his predecessor's. Last year Dr Brian McNamee's package was worth $7.69 million.
Is Perreault cheaper because he's just a plain old Mr, as opposed to medical doctor McNamee?
CBD joins the fray
There's hearsay evidence, there's eyewitness evidence and there's the rolled gold standard: CBD.
Thursday's column has made an unexpected appearance in the Victorian Supreme Court stoush between Myer and designer Kym Ellery, whom the department store accuses of breaching her contract in order to go over to rival David Jones.
Myer has dragged DJs into the fracas by demanding internal documents, including supply agreements, and on Friday DJs' barrister Charles E. Shaw returned the favour by telling the court his clients needed access to internal Myer communications, in particular any correspondence to and from media relations rep Jo Lynch, about the case.
He suddenly pulled out Thursday's CBD column as evidence, where Myer boss Bernie Brookes was quoted saying Myer still wanted a relationship with Ellery but "it's no good saying we'll all be high-fiving at the end of it".
Shaw said the communications were necessary to find out "whether Myer would be ready, willing and able" to resume the relationship if Ellery was forced to abandon the new deal with David Jones.
He said DJs needed to determine if what Myer was saying externally was the same as what staff were saying internally.
Wheeler dealers
It's to be war on wheels when commercial property's finest clash with corporate advisers and childcare tsars next weekend.
Executives from Colliers, Mirvac and Aviva, led by Mirvac capital partnerships boss Bevan Towning, are limbering up as they prepare to ride all the way around Tasmania as part of this year's Tour De Kids.
The event, which raises money for the Starlight Children's Foundation, will pit the joint Colliers/Mirvac/Aviva team against a Lend Lease team, led by Lend Lease Primelife CEO Paul Walsh, a team led by Fort Street Advisers principal Richard Hunt, and a Jigsaw Childcare team led by Guardian Childcare Alliance boss Tom Hardwick. Mercifully, entries to this feast of masochism have closed, but donations in support can be made through the Tour De Kids website.
Frequently Asked Questions about this Article…
According to CSL's ASX disclosure described in the article, Paul Perreault has a flat US$1.7 million a year cash salary and can earn up to the same amount again as an annual bonus. CBD calculated his pay could be worth up to about $5.3 million a year once other incentives are included, and a long‑term incentive plan could add up to a further 120% of his base pay depending on outcomes.
The article explains that CSL will pay part of some bonuses and long‑term incentives as 'phantom shares' — a form of deferred payment tied to CSL's share performance. For Perreault, the phantom shares portion is settled in cash after three years, so their value depends on how CSL shares perform over that period.
Perreault's annual bonus structure in the disclosure splits the bonus so two‑thirds is paid as cash immediately and the final one‑third is paid as phantom shares (converted to cash after three years). Additionally, half of the long‑term incentive is also awarded in phantom shares.
The article notes there is still a gap: Dr Brian McNamee's package last year was reported at $7.69 million, which is higher than the initial amounts disclosed for Perreault, although Perreault's total pay could increase with bonuses and long‑term incentives.
The ASX disclosure gives investors transparent detail on how CSL is incentivising its new CEO: a mix of cash salary, near‑term cash bonuses and deferred phantom shares tied to long‑term share performance. Everyday investors can use these details to understand management incentives and how executive pay is linked to the company's share price and long‑term performance.
Per the article, phantom shares at CSL are paid as cash after three years if the share price trend supports it. While phantom shares themselves are a deferred cash payment (not new shares), their payout depends on CSL's continued long‑term share strength — so shareholders should watch how executive incentives align with company performance.
The article says a barrister for David Jones pulled the CBD column into evidence because it quoted Myer boss Bernie Brookes and could help determine whether Myer would be 'ready, willing and able' to resume a relationship with Kym Ellery if she was blocked from her new deal with David Jones. The column was used to probe whether Myer's public comments matched internal communications.
The article lists executives and teams from Colliers, Mirvac and Aviva (led by Mirvac capital partnerships boss Bevan Towning), a Lend Lease team led by Paul Walsh (Lend Lease Primelife CEO), a team led by Fort Street Advisers' Richard Hunt, and a Jigsaw Childcare team led by Guardian Childcare Alliance boss Tom Hardwick. The event raises funds for the Starlight Children's Foundation and accepts donations via the Tour De Kids website.
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