BLT Annual Meeting 28 July
I received the notice of this year's annual meeting of shareholders in the mail today.Included on the agenda is a resolution to increase the aggregate amount payable to non-executive directors from the current total of $150,000 (approved in 2015) to $265,000, effective from the fourth quarter of the current financial year.
The explanatory notes state inter alia:
a) Since 2015 the company's business has grown significantly and the role of the Board has expanded and the current fees do not adequately compensate non-executive directors for the work they do.
b) There is a need to increase fees to attract new directors with one of the long-standing directors exiting the Board.
c) The increase will bring remuneration closer to market rates (but will still be below market) as recommended by Signium Executive Search International.
d) The company's move from an R&D focus to targeting market development & sales and that it is now in a different phase in its life cycle, may require it to seek directors with different skills who can assist BLT to achieve its strategic growth plan. (I guess this implies the current directors - or some of them - may not be the right people.)
Two directors appointed in July 2014 retire by rotation but both are offering themselves for re-election despite the current "inadequate" level of remuneration. Veronica Aris has 17 years sales & marketing experience in relevant related industries. Graeme Boyd was CEO of Comvita form 1998 t0 2005 and is now a consultant specialising in company turnarounds, growth strategies and international marketing.
I'm not sure that the timing of this request is particularly opportune with the company failing to meet its earlier guidance and still not recording a maiden profit. I am sure though, that there are plenty of long-suffering shareholders who have supported BLT through thick and thin who would like to see a positive result achieved on the bottom line before they start paying the directors any more.
Maybe though its a chicken and egg situation and if BLT can attract new directors with different skills we may start to see the results we are anxious for the company to achieve. I would be interested in the views of other holders on this resolution.
I am unable to attend the meeting this year (I went in 2016) but would be prepared to consider giving my proxy to someone who can attend, listen to the discussion and cast a vote in line with what they consider to be in the best interests of the company.
Comments welcome.
Pierre