Director fee rise overdue, Spark investors told
Spark directors won their bid for a ‘‘modest’’ increase in pay of 8.7 per cent.
At the company’s annual meeting at Auckland’s Eden Park, shareholders voted in support of lifting the director fee pool from $1.5 million to $1.63m, though directors would not get individual pay rises in the current financial year.
The last time the fee pool was raised was 14 years ago, though the company was significantly larger then because Chorus had yet to be spun off into a separate business.
Despite fierce competition in the broadband and mobile markets, shareholders have seen both Spark’s share price rise and revenue grow since the annual meeting last year.
Not all shareholders were happy with the pay rise.
Lynn Webber, who has been a shareholder since 1983, spoke against the motion, saying her first reaction to the proposed rise was: ‘‘By gosh, you must have been overpaid 14 years ago.’’
‘‘Over the last nine years there has been an increasing culture of entitlement.’’
The New Zealand Shareholders’ Association (NZSA) supported the pay rise, which outgoing chairman Mark Verbiest described as ‘‘modest’’.
In the year to the end of June, Verbiest was paid $357,000 and the base non-executive director fee was $141,000.
‘‘While the chair figure is certainly competitive, we think the non-executive director base is slightly light compared to many peers,’’ the NZSA said in voting guidance to members. ‘‘Spark has performed well in a very competitive market, managing to take market share while lifting profit.’’
Managing director Simon Moutter said: ‘‘We’ve replaced our dominant old-world brand with a portfolio of vibrant new brands. Our slow defensive culture is now customer-inspired, fast and focused on winning.’’
‘‘We’ve replaced an outdated, complex network of IT systems with market-leading data network and service platforms.’’
Among its plans are redeveloping Lightbox, Spark’s TV and movie on demand service, watched by around 1 million people, into a marketplace where studios could sell their programmes on a pay-per-view basis.
Verbiest said: ‘‘We’ve returned to earnings growth – modest growth of a few per cent, but growth nonetheless.’’
‘‘Every year, we lose around
$100m of revenues from our legacy voice and managed data operations. That means in July
2016, we started the financial year knowing we needed to make another $100m from elsewhere just to stand still.’’
Cost-cutting, increased use of artificial intelligence and automation were all key for Spark to remain competitive, shareholders heard.
Moutter said that five years ago, the highest-end broadband deals would set customers back almost $150, but the best one now was less than half that. There were more than 80 broadband providers in the market, and many were probably in a ‘‘financial hole’’.
‘‘I’d expect reality to hit for more and more players.’’
Justine Smyth, who replaced Verbiest as chairman, is the first woman to hold the position at Spark.
"Spark has performed well in a very competitive market."
Shareholders' Association