Feltex Director Resigns Over Staff Severance Packa
Wellington, New Zealand, July 14--The $1.2 million severance of four senior Feltex managers has led to a falling out in the boardroom of the troubled carpet maker, according to the New Zealand Business Herald.
Craig Horrocks, who stepped down on Monday after eight years on the Feltex board, yesterday told the Business Herald a difference of opinion relating to conditions of those exits was part of his decision to leave.
"In any board there are always differences of view, and at some stages those differences as to how things are handled surface to the point where one or other director feels it's not an appropriate thing for them to go forward - which was the situation I was in," he said.
"I wouldn't have resigned if there hadn't been those differences."
Feltex chairman Tim Saunders yesterday declined to give further details on Horrocks' resignation, and wouldn't confirm whether the severance payout was the primary reason.
The departure of Horrocks, who chaired the company's audit and risk management committee, comes at a sensitive time for the company.
Last month it was clobbered by shareholders for failing to live up to profit forecasts of its prospectus when it listed on the stock exchange a year ago.
The company has downgraded its profit forecast twice since then, and its earnings for the year to June 30 are now likely to be half of the $23.9 million earlier forecast.
Feltex blames its woes primarily on a sudden downturn in the Australian residential carpet market and on the strength of the dollar against its Australian and United States counterparts.
But analysts have criticised management for their apparent failure to react to what many claim was a widely anticipated market slowdown across the Tasman.
Last month the company announced chief executive Sam Magill would step down at the end of the year, as part of a wide-ranging review of the company's operations. His payout has yet to be determined.
Saunders said more changes could be made once a new chief executive was appointed, most likely before Christmas.
Last week Feltex began merger talks with its rival Godfrey Hirst, a move that would create the largest carpet manufacturer in Australasia.
The Australian carpet maker is now Feltex's largest shareholder, after snaring a 5.78 per cent stake in a market stand late last month, for which it paid 58c a share.
Godfrey Hirst finance director Jim Walsh said the company had noted Horrocks' departure with interest, but had no further comment.
The four senior executives who are to leave Feltex over the next few months, at a cost of $1.2 million, are: John Kokic, chief operating officer; Rod Lyons, general manager residential sales; John Shackleton, general manager customer services and distribution; Terry Baker, Australasian sales manager, wool.
