I'd have to say that I was gobsmacked to see how much Jim Minto is being paid to run Tower.
For the record it is $750,000 plus bonuses which, assuming all goes well, gets him through the $1 mill mark, then there are options too. That's in the same league as Theresa Gattung at Telecom, which is a slightly larger company than Tower.
Clearly I am not the only one thinking this .
Here is one email I received yesterday:
"His pay should be less than Helen Clark's, say $250,000 plus bonuses on higher than average sharemarket returns. Deductions for underperformance, as with small business owners.
Insurance is a hit or miss business as evidenced by the results of this company over time."
I have a lot of respect for Jim and think he has done a good job. And I have to say good on him for negotiating such a deal.
But the issues as I see it are that Tower, according to sharebrokers, is not out of the woods yet. It seems everyone else it deals with is seeing cuts of some kind.
Such exorbitant salaries only help fuel the thought in investors' minds that the only winners in this game are the fund management companies themselves.
Customers who keep hearing about the need for cost cutting within the organisation see it as one rule for them and one for Tower.
What has to happen is that the board clearly needs to explain its reasoning for such a deal.
Disc: I own shares in TWR| « How the mighty have fallen (or should it be how times have changed?) | Cullen v Key - Round One » |
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