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Happiness is one crisis after another

At least someone had a great time while the global financial system teetered on the edge of collapse. The Commonwealth Bank's outgoing chief executive, Sir Ralph Norris, in his parting message to shareholders yesterday, did not express too much concern about the turmoil that has led to the collapse of several Wall Street investment banks and brought several countries to their knees.

At least someone had a great time while the global financial system teetered on the edge of collapse. The Commonwealth Bank's outgoing chief executive, Sir Ralph Norris, in his parting message to shareholders yesterday, did not express too much concern about the turmoil that has led to the collapse of several Wall Street investment banks and brought several countries to their knees.

"I have enjoyed the many challenges we have faced over the past six years, many that were unanticipated, such as the global financial crisis," explained Sir Ralph, who last financial year had $7.72 million worth of "previous years' awards" vest on top of his $4.76 million in cash payments.

HONESTY PAYS

Honesty is one key performance indicator that appears to have performed well at the letterbox leaflet and magazine printing business PMP Limited.

After a bumper 2010 in the honesty arena, PMP has had another stellar year of being honest despite reporting a $11.3 million full-year loss and seeing its shares fall more than 30 per cent since December.

So seriously does PMP treat the issue of honesty that it even notes in its annual report (in bold) that its success depends "on honesty, responsibility and integrity". "We do not compromise our high ethical standards, mislead others or hide from our responsibilities". Phew.

To drive home the importance of being honest, PMP disclosed in its annual report that its chief executive, Richard Allely, pocketed a $401,185 short-term incentive (STI) on top of his $855,750 base wage last financial year. Allely received 31 per cent of his maximum STI. But given he failed to get the 70 per cent of the STI that is linked to profits, it seems Allely cleaned up on the parts of his bonus linked to "personal objectives" and "improved safety".

PMP did not specify what the "personal objectives" related to. CBD can only assume they might be linked with what Allely highlighted in last year's annual report: "Honesty, reliability, teamwork, leadership and professionalism". One wonders how you measure honesty. A polygraph?

Let's just hope the 48 per cent of PMP shareholders who voted against last year's remuneration report have calmed down.

The company has popped a resolution for its annual meeting for Allely to be awarded 2.1 million share rights - half of which will vest based on earnings before interest, tax, depreciation and amortisation profits and the other half on shareholder returns over the next three years. PMP has declined to specify what the EBITDA hurdles actually are, arguing they are "commercially sensitive".

EARLY BIRD

Virgin Australia was happy to let Qantas be the first airline yesterday to trumpet its signing of a long-term commercial deal with Rio Tinto.

The former Rio Tinto CEO Leigh Clifford, now chairman of Qantas, blurted in a press release in the morning that its "long standing partnership" with Rio would continue.

Then after lunchtime came the belated announcement from Virgin that it had "won part of Rio Tinto's global contract for air services".

Virgin Australia declared it as "an outstanding achievement" and that it looked "forward to providing Rio Tinto with the best possible service".

The Qantas press release also referred to the miner as Rio Tino.

READ THE LINES

Yesterday's "Elephant in the Room Announcement Award" goes to the manager of the MFS-founded Premium Income Fund, Wellington Capital.

The Wellington founder, Jenny Hutson, in an investor update yesterday noted how she was committed to "no further capital raising" and "limiting fees to 0.7 per cent of funds under management for two years".

Hutson also noted how the annual financial report "has been completed". She just failed to mention that the fund's auditor PricewaterhouseCoopers declined to provide an opinion on the accounts.

PwC partner Timothy Allman said in the PIF accounts he was unable to attain appropriate evidence on the $135.7 million valuation on the loans made by the mortgage fund to various developers - loans that make up 60 per cent of the fund's net assets.

"At the date of issue of this report, we were unable to obtain access to the external advisers and their supporting work papers and, as a result, were unable to evaluate the appropriateness of the advisers' work and obtain sufficient appropriate audit evidence in relation to the recoverable amount of the mortgage loans."

PIF unitholders might be wondering whether it would be appropriate for Wellington to base its management fees on a valuation that was not signed off by an auditor.

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