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 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' chief executive (and ex-Stocklander) Darren Steinberg have his $1.4 million base wage frozen over 2013.
This compares to the $1.55 million in base pay that Steinberg's predecessor Victor Hoog Antink 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 where 28 per cent of shareholders voted against the remuneration report and Hoog Antink's $3.95 million package.
Despite Dexus shares more than halving since the listed property crash of 2007, Hoog Antink's total pay ended up being more than double the $1.75 million he received in the 2006 financial year. Tough times indeed.
No sacrifices here
ANOTHER company that property investors are keen for some compassion from is Aspen Group, which saw 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, which included $973,000 in base pay and a $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 their 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.
All right for some
FORMER New South Wales 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.
Packer peeved
FORMER One.Tel director James Packer provided a formal response yesterday to a report in The Sydney Morning Herald, The Age's sister paper, regarding his plans on Crown's shareholding in the owner of Sydney's Star City 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 Ltd 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? 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?
Dexus announced a new executive remuneration framework to better align pay with security holders. Under the changes, CEO Darren Steinberg’s $1.4 million base salary was frozen for 2013, the group scrapped its existing performance payment plan and reconfigured short‑ and long‑term option plans. The review followed a shareholder revolt in which 28% voted against the remuneration report and the previous CEO’s $3.95 million package.
Are other listed property trusts following Dexus in cutting or freezing executive pay?
Yes. The article notes Dexus followed the lead of Mirvac and Stockland in revising executive pay arrangements. The broader trend in the listed property sector is executives agreeing to changes—such as pay freezes or altered incentive plans—to better share the pain with investors.
What happened at Aspen Group and how did it affect investor value?
Aspen Group issued a profit downgrade and recorded a $95 million asset writedown. Despite that, Aspen’s managing director Gavin Hawkins was paid $1.66 million last year (including $973,000 in base pay and a $544,000 cash bonus). The company is valued at around $200 million on the share market and its shares are down about 88% from their 2007 peak.
Why did Dexus shareholders vote against the remuneration report last year?
Around 28% of shareholders voted against Dexus’s remuneration report, in part due to concerns over large executive pay packages despite a significant decline in the group’s share price (shares more than halved after the 2007 listed property crash). The vote targeted the previous CEO Victor Hoog Antink’s $3.95 million package.
How have FKP’s CEO pay and the company’s share price changed in recent years?
FKP chief executive Peter Brown’s fixed pay increased from $400,000 to $1.5 million a year since 2003. Over the same period his company’s shares have fallen sharply — the article notes FKP’s share price is down more than 90% from its 2007 high.
What did John Brogden say about the superannuation preservation age and why does it matter to investors?
John Brogden suggested reconsidering whether the superannuation preservation age of 60 is still appropriate. He pointed out the seven‑year gap between preservation age (60) and the retirement age for the age pension (67) could encourage retirees to draw down super early, and argued that increasing the preservation age could boost economic growth by raising labour force participation among older workers.
What was James Packer’s response to reports about Crown’s possible move on Echo Entertainment?
James Packer formally denied having any arrangements with K.T. Lim in response to media reports that Crown might seek majority control of Echo Entertainment in concert with the Malaysian billionaire’s Genting business. He also publicly criticised The Sydney Morning Herald’s reporting in strong terms.
What red flags from this article should everyday investors watch in property trust stocks?
Key signals to watch are: changes to executive remuneration (pay freezes, scrapped incentive plans), large asset writedowns or profit downgrades (for example Aspen’s $95 million writedown), significant shareholder votes against remuneration reports (like the 28% revolt at Dexus), and steep share price declines. These items can indicate governance concerns or financial stress that matter for investors.
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