TEN 0.00% 16.0¢ ten network holdings limited

directors raid cash jar as shareholders loose

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    TEN Network executive chairman Nick Falloon had his pay boosted by $2.4 million last year despite the group's plummeting share price.

    Mr Falloon's total pay grew to $5.8 million in the year to August: a 70 per cent rise on the $3.4 million he received a year earlier, according to Ten's annual report, which was released yesterday.

    Mr Falloon's No 2 at Ten, television boss Grant Blackley was granted a 64 per cent pay rise to almost $2 million, after large hikes in both his base salary and cash bonus.

    The rises are likely to prompt objections among shareholders at the company's annual general meeting next month, after protest votes were registered against the remuneration reports of Wesfarmers and Fairfax Media at AGMs in recent days.

    Like many media companies, Ten shareholders have endured significant shredding of shareholder wealth over the past year, which has seen the company's share price more than halve from $2.73 a year ago to just $1.325 yesterday.

    That values Ten -- Australia's No3 commercial network -- at just over $1.2 billion, down from as much as $2.5 billion in the last year.

    But Mr Falloon's pay has risen despite the huge fall in Ten's market value. The big boost to Mr Falloon's salary came from his "cash bonus" component, which rose 300 per cent from just $525,000 last year to $2.2 million this year.

    A note to the Ten accounts indicates some of this rise came as a result of a shelved bid by the company's 56.5 per cent shareholder, Canadian-based CanWest Global Communications, to sell off the Australian network last year.

    The company's "remuneration report" said that there were one-off payments made "to the executive director (Mr Falloon) and certain other executives" totalling $1.58 million. The report noted these payments were "in relation to a proposed sale process".

    A number of private equity firms negotiated to buy Ten last year, but CanWest did not accept the prices they were willing to offer.

    Other executives to benefit from the payments for the lapsed sale process included Mr Blackley and Ten's outdoor advertising boss Gerry Thorley, who had large hikes in both their cash bonuses and total packages.

    Mr Blackley's bonus alone jumped from $85,500 last year to more than $569,000 this year, while his base salary rose 34 per cent to $1.1 million.

    Ten spokeswoman Jeannette McLoughlin confirmed there had been an agreement between executives of the company and CanWest" about bonuses in relation to last year's shelved Ten sale process.

    But she pointed to a note in the remuneration report that said the bonus payments were paid back to Ten by CanWest: "That means the cost to Ten was nil," she said.

    CanWest can ill afford to pay such bonuses to Australian executives, after its shares closed at an all-time low on the Canadian market on Friday night. CanWest is struggling under a multi-billion-dollar debt burden, that has led to speculation it is looking to sell Ten.


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