Pacific Brands chief sees bonus disappear along with jobs

THE chief executive officer of Pacific Brands, Sue Morphet, took home a lower salary and had her bonus slashed to zero in the 2009 financial year when the company underwent a massive restructure and sacked hundreds of workers.

By InvestSMART · 19 Sep 2009

By InvestSMART ·
19 Sep 2009

Ms Morphet's fixed salary was $703,559 in 2008-09 about $39,000, or 5.3 per cent, lower than the $742,444 the previous year, Pacific Brands said in its annual report.

She received no bonus payment, unlike the 2008 financial year when her incentive payment was $700,000.

Under Pacific Brands' remuneration policy, Ms Morphet was potentially eligible for a bonus payment of 100 per cent of her salary.

The annual report said that in the 2009 financial year, the condition of a bonus to any executive was that profit after tax had to be more than the budgeted profit growth hurdle.

Pacific Brands reported a headline loss of $234.5 million in 2009 compared with a profit of $116.6 million in 2008.

"In the 2009 financial year, the threshold criterion ... was not met," the report said. "Cash bonuses were not paid to the chief executive of any other member of the senior executive team."

In 2009, Ms Morphet received $136,500 in superannuation benefits and her share-based payments were $188,811 about 29 per cent lower than the previous year's $265,227. The lack of a bonus pushed down Ms Morphet's total pay by 42.5 per cent from $1.86 million to $1.07 million in 2009.

The chief executive's total potential package consists of fixed remuneration (36.5 per cent of the total), short-term incentives (29.3 per cent), and long-term incentives (34.2 per cent). Performance-based remuneration amounts to almost two-thirds (63.5 per cent) of her total package. Writing in the annual report, Ms Morphet and the chairman, James MacKenzie, said the need for a company restructure had been made clear by the Pacific Brands' 2010 strategic review.

This involved discontinuing, merging and divesting more than 150 brands and reducing stock-keeping by 10 per cent; increasing prices; slashing the workforce by more than 800; renegotiating more than 50 per cent of the volume of supplies from China; and closing four factories and half of another.

"The decisions will result in more than 1200 manufacturing employees being made redundant," they said.