1 00:00:00,520 --> 00:00:03,120 Speaker 1: Ever, du for c Ellen, there are concerns that the 2 00:00:03,120 --> 00:00:05,880 Speaker 1: warehouse is paying its executives too much given how poorly 3 00:00:05,920 --> 00:00:09,280 Speaker 1: the company's been performing. Despite the warehouse's shares falling to 4 00:00:09,320 --> 00:00:12,039 Speaker 1: a record low of ninety seven cents on Monday, former 5 00:00:12,119 --> 00:00:14,160 Speaker 1: chief executive Nick Grayson was paid a total of just 6 00:00:14,240 --> 00:00:17,560 Speaker 1: under two point eight million dollars in twenty twenty three, 7 00:00:17,600 --> 00:00:20,280 Speaker 1: which is more than any of his other counterparts in retail. 8 00:00:20,920 --> 00:00:23,240 Speaker 1: Oliver Amander is the CEO of the New Zealand Shareholders 9 00:00:23,280 --> 00:00:27,280 Speaker 1: Association with US. Now, hey, Oliver, how are you very well? 10 00:00:27,280 --> 00:00:29,440 Speaker 1: Thank you? This is this an historic problem where they 11 00:00:29,520 --> 00:00:31,840 Speaker 1: signed him on a really awesome deal when the company 12 00:00:31,880 --> 00:00:33,880 Speaker 1: was doing well, and then the company started doing poorly 13 00:00:33,920 --> 00:00:35,800 Speaker 1: and he was still, unfortunately on an awesome deal. 14 00:00:36,600 --> 00:00:39,879 Speaker 2: Well, there's probably a bit of that, but actually what 15 00:00:39,920 --> 00:00:41,640 Speaker 2: it does relate to in that figure you've mentioned of 16 00:00:41,720 --> 00:00:43,760 Speaker 2: two point eight million, some of that big chunk of 17 00:00:43,840 --> 00:00:46,600 Speaker 2: that relates to incentives, And of course the incentives are 18 00:00:46,640 --> 00:00:50,240 Speaker 2: fine from a shareholder's perspective when the company is doing well, 19 00:00:50,479 --> 00:00:53,159 Speaker 2: and when the company is not doing quite so well, obviously, 20 00:00:53,200 --> 00:00:57,480 Speaker 2: then an incentive probably doesn't apply. And the reason he 21 00:00:57,560 --> 00:01:01,120 Speaker 2: got paid an incentive of one point one million. That's 22 00:01:01,120 --> 00:01:03,480 Speaker 2: not a short term incentive actually FY twenty three, so 23 00:01:03,520 --> 00:01:06,800 Speaker 2: the last financial year he got no short term incentives 24 00:01:06,880 --> 00:01:10,200 Speaker 2: at all for his performance at the warehouse, and he 25 00:01:10,720 --> 00:01:14,959 Speaker 2: did he got his base salary of one point seven million. However, 26 00:01:15,160 --> 00:01:17,800 Speaker 2: the incentive that was paid related to long term incentive 27 00:01:17,800 --> 00:01:20,039 Speaker 2: awards that made back in twenty twenty. And guess what, 28 00:01:20,200 --> 00:01:22,440 Speaker 2: back in twenty twenty, the warehouse was actually doing pretty well. 29 00:01:22,800 --> 00:01:25,720 Speaker 1: So does this say to you that the incentives that 30 00:01:25,760 --> 00:01:31,080 Speaker 1: maybe the level was set too low as well. 31 00:01:29,720 --> 00:01:32,040 Speaker 2: Level was set too like it was too easy to 32 00:01:32,400 --> 00:01:35,319 Speaker 2: strike it. Yeah, and look possibly, and that's something we 33 00:01:35,600 --> 00:01:37,480 Speaker 2: got a little bit more digging into in terms of 34 00:01:37,480 --> 00:01:40,240 Speaker 2: the vesting conditions associated with that. Normally, when you were 35 00:01:40,280 --> 00:01:44,080 Speaker 2: awarded an incentive and shares performance rights, then there's the 36 00:01:44,160 --> 00:01:47,280 Speaker 2: vesting condition that goes that that vesting condition relates to 37 00:01:47,440 --> 00:01:50,320 Speaker 2: share price performance. Often as note, and certainly I think 38 00:01:50,320 --> 00:01:53,960 Speaker 2: the Warehouse does have a condition that relates. That incentive 39 00:01:54,320 --> 00:01:56,880 Speaker 2: that you actually get paid in the end related very 40 00:01:56,920 --> 00:01:58,880 Speaker 2: much to the share price performance. And now it's gone 41 00:01:58,880 --> 00:02:03,560 Speaker 2: against its pairs. So yes, last year that the incentive 42 00:02:03,560 --> 00:02:06,800 Speaker 2: we received was mostly that long term incentive, but probably 43 00:02:06,920 --> 00:02:08,680 Speaker 2: data from the previous. 44 00:02:08,720 --> 00:02:10,680 Speaker 1: Is a historic thing. Do you think, though, now that 45 00:02:10,720 --> 00:02:12,600 Speaker 1: the company is doing so poorly, do you think it's 46 00:02:12,600 --> 00:02:14,440 Speaker 1: going to be different for his replacement. I mean, whoever 47 00:02:14,480 --> 00:02:16,240 Speaker 1: takes over from him is probably not going to get 48 00:02:16,240 --> 00:02:17,280 Speaker 1: the same kind of pay. 49 00:02:17,160 --> 00:02:20,120 Speaker 2: Right well, not in the short term. I actually said 50 00:02:20,400 --> 00:02:24,919 Speaker 2: that if the company, the company needs to be turned around, 51 00:02:24,960 --> 00:02:26,360 Speaker 2: that will take a lot of work. They need a 52 00:02:26,440 --> 00:02:29,600 Speaker 2: very good leader to come in there and actually to 53 00:02:30,040 --> 00:02:33,240 Speaker 2: have some milestones in place that really reset companies change 54 00:02:33,280 --> 00:02:36,200 Speaker 2: back to being a profitable and high performing entity. So 55 00:02:36,400 --> 00:02:39,160 Speaker 2: arguably and to still we have still a very big organization. 56 00:02:39,160 --> 00:02:41,360 Speaker 2: It still has eleven thousand staff, got stores all across 57 00:02:41,400 --> 00:02:45,600 Speaker 2: New Zealand. It's it's still it has a huge share 58 00:02:45,639 --> 00:02:48,560 Speaker 2: of retail wallet if you will, in a really tough 59 00:02:48,639 --> 00:02:52,679 Speaker 2: economic environment right now. So the base salary is meant 60 00:02:52,720 --> 00:02:55,000 Speaker 2: to reflect that, and the base salary that is higher 61 00:02:55,040 --> 00:02:58,640 Speaker 2: than his peers or the CEO's ps. Sorry at excoes 62 00:02:58,720 --> 00:03:02,520 Speaker 2: and KMD what can do brands, but that's probably appropriate. 63 00:03:03,200 --> 00:03:05,640 Speaker 2: What we're really interesting there will be the infrastructure that 64 00:03:05,720 --> 00:03:09,480 Speaker 2: they put in place, because actually you do want some 65 00:03:09,600 --> 00:03:13,480 Speaker 2: center structure and reflects long term gains for shareholders, so 66 00:03:13,560 --> 00:03:16,840 Speaker 2: that long term performance off the warehouse, and also they 67 00:03:16,919 --> 00:03:19,639 Speaker 2: reflect some of those short term or more short term 68 00:03:19,639 --> 00:03:22,680 Speaker 2: transformational while don't really needed to turn the company around. 69 00:03:23,000 --> 00:03:25,600 Speaker 2: So actually, no, I don't know if you will see 70 00:03:25,680 --> 00:03:28,680 Speaker 2: much change in terms of the remuneration structure or potential 71 00:03:28,720 --> 00:03:31,520 Speaker 2: out What it does mean is that if the CEO 72 00:03:31,840 --> 00:03:34,840 Speaker 2: or incoming CEO is successful in transforming the warehouse and 73 00:03:34,840 --> 00:03:37,600 Speaker 2: making share price you up again, You'll probably be calling 74 00:03:37,600 --> 00:03:40,200 Speaker 2: me in three years time saying, hey, the CEO has 75 00:03:40,200 --> 00:03:42,960 Speaker 2: got paid an awful this year and that's that's that 76 00:03:43,000 --> 00:03:47,960 Speaker 2: will probably be right because those shares, if there's if 77 00:03:48,000 --> 00:03:50,480 Speaker 2: that's succeeded, they will see an increase in value in 78 00:03:50,560 --> 00:03:52,440 Speaker 2: the shares and therefore their own remuneration. 79 00:03:54,120 --> 00:03:56,400 Speaker 1: That's okay, yep, absolutely if they deserve it. No one's 80 00:03:56,400 --> 00:03:58,600 Speaker 1: going to complain about it, hopefully, Oliver. Thank you so much, 81 00:03:58,600 --> 00:04:00,160 Speaker 1: appreciate your time. As always, it's all of them and 82 00:04:00,200 --> 00:04:02,480 Speaker 1: a chief executive of the Shareholders Association. 83 00:04:03,240 --> 00:04:05,480 Speaker 2: For more from Hither Duplessy Allen Drive. 84 00:04:05,640 --> 00:04:09,000 Speaker 1: Listen live to News Talks a B from four pm weekdays, 85 00:04:09,160 --> 00:04:11,360 Speaker 1: or follow the podcast on iHeartRadio.