Wellington, New Zealand, March 16, 2006--Carpet-maker Feltex Carpets Ltd. Thursday revealed details of the remuneration package it proposes to pay its new chief executive, saying he will receive A$420,00 base pay, with an annual performance incentive bonus of up to 80% of that amount.
The details are contained in a public application made by New Zealand-based Feltex Carpets to the New Zealand stock exchange for a waiver from a listing rule relating to the remuneration deal.
The statement said Peter Thomas, who was appointed as chief executive of Feltex in November last year, will be paid the incentive bonus part of his package if he achieves agreed targets.
If Thomas does reach the maximum bonus level, his package would likely total A$756,000.
Thomas, who was a director of Feltex before his appointment, will not be paid director's fees, Feltex said.
At the time of Thomas's appointment Feltex declined to discuss what he would be paid, but the details have been released because the total possible remuneration payable is likely to exceed 0.5% of the average market capitalization of Feltex.
The remuneration deal is therefore likely to be termed a material transaction with a related party, and would be subject to shareholder approval.
However, Feltex applied to the New Zealand stock exchange for a waiver to the rule, saying that the terms of Thomas's remuneration package were set "on an arm's length and commercial basis."
The company said a report on comparative remuneration packages was provided by employment consultants Egan Associates Ltd., and Thomas's base remuneration is below the average base remuneration amounts advised.
The maximum possible performance bonus that Thomas may earn is also "within the range of bonus amounts advised," Feltex added.
Thomas's pay is less than the package paid to Feltex's previous chief executive Sam Magill, the company noted.
The stock exchange said in the statement that is has agreed to the waiver, subject to "non-interested" directors of Feltex signing a certificate stating that, among other things, the proposed remuneration agreement "represents fair value to the company, and is in the best interests of the shareholders of the company."
Feltex listed on the local stock exchange in mid-2004 in a NZ$254-million initial public offering that was the year's largest in New Zealand.
But the company fell well short of its prospectus earnings projections, reporting a net profit of NZ$11.8 million in the fiscal year to June 30 2005, about half the forecast NZ$23.9 million.
The company's share price slumped to an all-time low of NZ$0.39 and its former chief executive departed.
Recently the stock has returned to its all-time low after Feltex earlier this month said sales and margins in February were lower-than-expected, despite it continuing with a restructuring program.
