CML 3.23% 3.0¢ chase mining corporation limited

cml directors greed - crikey's analysis

  1. 18,561 Posts.
    If you are wondering why the shares have fallen over the last two days Crikey.com.au has some suggestions:

    1. EXECUTIVE GREED AT COLES MYER

    We've seen some breathtaking executive greed in our time but the Coles
    Myer
    management team will take some beating based on the figures released in
    the
    annual report today.

    The company tried to take the heat out of the announcement by revealing
    the
    additional 1.5 million options for CEO John Fletcher yesterday but these
    numbers deserve to be up in lights in tomorrow's papers.

    Not content with walking out of Brambles with $8.65 million in his final
    year, John Fletcher has pocketed $4.34 million in for his efforts in the
    year to July 31.

    And when you overpay the CEO, the underlings also get bulging pay packets
    and Coles Myer has not disappointed with Myer Grace CEO Dawn Robertson
    scoring $3.18 million, Kmart's Hani Zayadi $2.94 million, Target's Larry
    Davis $2.33 million, outgoing Supermarkets boss Alan Williams $1.95
    million
    and even Tim Hammon, the head of "corporate and property services" scored
    $1.85 million.

    The Fletcher package included an estimated $584,667 on his existing 2.5
    million options which are already $3.7 million in the money.

    This really is a joke. Are Coles Myer really claiming Fletcher doesn't
    have
    enough incentive when his current deal is the right to buy 2.5 million
    shares at $6.33 for a total of $15.825 million?

    When you add the additional 1.5 million options, Fletcher will be entitled
    to spend about $28 million buying shares which is ridiculous because he
    could never afford to take on such a risk and would end up doing one of
    those controversial cap and collar deals which his rival at Woolworths
    Roger Corbett has done.

    Corbett has options to buy a staggering $40 million worth of Woolworths
    shares and yesterday explained that he couldn't get finance to exercise
    his
    latest options conversion, hence the need for the "cap and collar" with
    Macquarie Bank.

    As a rule of thumb, a CEO should be entitled to buy shares each year which
    are broadly equal to the value of salary paid. Anything higher than that
    and you get potential conflicts of interest over dividend and capital
    management policies as well as the spectre of a CEO dumping stock.

    Crikey is going to assemble a list of the largest options play in the
    market and expects News Corp COO Peter Chernin will be top of the pops
    with
    options to buy almost $200 million worth of shares whilst the big bank
    CEOs
    will be next as they average options over almost $100 million worth of
    shares each.

    Coles Myer shares fell a further 12c to $7.71 today and combined with
    yesterday's 13c drop the stock has lost 25c or 3.15 per cent since news of
    the indulgent options issue hit the market.

    The silly duffers have given Solly Lew something to target and you can be
    assured he'll be voting his 5 per cent stake against the Fletcher
    options.

    With the ASA already pledging to vote against them, there is a small
    chance
    that Coles Myer will get rolled and they deserve to as they clearly have
    learnt little from the excessive pay packets afforded to Fletcher's
    predecessors, Brian Quinn, Peter Bartels and Denis Eck.

    end quote.

    I hold
    regards
 
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