Showing posts with label Incentive schemes. Show all posts
Showing posts with label Incentive schemes. Show all posts

Thursday, May 19, 2011

Larger Incentives for Sky City CEO Make Sense

There is nothing like a good and appropriate incentive to get an individual to do a better job and in the case of Sky City Entertainment Group [SKC.NZX] CEO Nigel Morrison , to retain his services for a longer period.

The Sky City board announced yesterday that Morrison's incentive package will be sweetened to potentially triple his current incentive package which currently sits at interest free loans to purchase $1.2 million shares based on hitting a number of financial targets.

The new deal allows Morrison to receive SKC shares worth up to $3.6 million immediately rather than wait for 2-3 years as per the old plan. This incentive is based on the company’s financials for the six month period to 31 December 2010, which were announced to the market on 16 February 2011. Incentives based under a long-term incentive plan are in addition to his salary, which was stated in last year's annual report as $2,556,408.

Now it is not often that I champion increased pay packages for CEO's and boards (you can bet other executives will be getting bigger pay packages in the near future) but under Morrison's tenure profit for the company has risen from $102 million before his appointment to a record $129 million to June 30 2011 (see 2010 Annual Report) so his bonus for results and retaining him for the medium term is a very good move by the board and one that other boards should look to to incentivise CEOs.

My only gripes are that given his track record of raising profit by 30% in 3 years the potential tripling of his pay appears mostly for retaining him rather than his past results and that the board sought a waivier from the NZX rather than consulting owners like myself who would have gladly voted some sort of increase in incentive.

Nigel Morrison therefore will be under intense pressure to deliver big increases in profit over the next 3 years and I can only see one more big result coming in 2012 full year to 3o June due to the 2011 Rugby World Cup before he will have to spend some big money either buying another casino somewhere in Australasia or spending much larger sums that he already is to increase foot traffic through his casinos.

Of course this sort of incentive does have the risk that the CEO will take bigger risks to get his bonus but he does have a track record of good results wherever he has been in charge and as he is an accountant by trade they tend to be completely focsed on the bottomline before anything else and that cannot be a bad thing at all where shareholders moola is concerned.


Disc: I own SKC shares in the Share Investor Portfolio


Sky City Convention Centre @ Share Investor

Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
SKC Convention Centre power-point slide illustrations & SKC submission to Auckland City Council

Sky City Entertainment Group @ Share Investor


Share Investor's Total Returns: Sky City Entertainment Group Ltd
Sky City Entertainment Group Ltd: Presentation to Macquarie Group
Morningstar Revalues Sky City Entertainment Group
Guest Post - Michele Hewitson Interview: Nigel Morrison
Failed Sky City bid for Christchurch Casino good news for Shareholders
Sky City Entertainment Group Ltd: Christchurch Casino bid falls short of Investment Criteria
Sky City Entertainment Group Ltd: Never mind the width feel the volume
Sky City Annual Meeting & 2011 - 2012 Profit Forecast
Stock of the Week: Sky City Entertainment Group Ltd
Sky City set to lose National Convention Centre bid
Sky City Entertainment Group: Australian Acquisition on the Cards?
Sky City Entertainment Group Ltd: 2010 Full Year Profit Analysis
Sky City Entertainment Group 2010 Full Year Profit Preview
Chart of the Week: Sky City Entertainment Group Ltd
Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Share Investor Q & A: Sky City CEO, Nigel Morrison
Sky City Entertainment: CEO Nigel Morrison discusses 2010 HY
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
Sky City Entertainment Group Ltd: Download full Company analysis
Sky City 2010 full year profit looking good
Long Term View: Sky City Entertainment Group Ltd
Sky City Entertainment: CEO Nigel Morrison discusses 2010 Half Year
Sky City Entertainment Group 2010 Interim Profit Review
Sky City to focus on Gaming
Sky City debts levels now more manageable
Insider Trading on Sky City shares
Sky City Profit Upgrade: Always on the Cards
Sky City's Current Cinema "Boom" a Horror Story in Disguise
Stock of the Week: Sky City Entertainment Group
Are Insiders selling Sky City Stock?
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City share offer confusing and unfair for smaller shareholders
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit


Discuss SKC @ Share Investor Forum
Download SKC Company Reports

Recommended Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A    Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $6.99
Usually ships in 24 hours

Fishpond


c Share Investor 2011

Friday, July 24, 2009

Beam me up Davy

I think Contact Energy directors have been watching too much moon landing coverage over the last week because its seems that a number of them may have disappeared up their own planet of Uranus.

Clearly some live in a parallel universe when they can cost their company nearly 40000 customers in just under a year by making a public exhibition of himself by raising electricity prices, granting directors big bonuses and having an expensive boozy lunch on the company in October last year and then expected to be rewarded for it.

David Baldwin, managing director and CEO of Contact Energy Ltd [CEN.NZ] yesterday applied for a waiver from the NZSX to get "financial assistance", an interest free loan from Contact Energy shareholders, so he can participate in the company's Long Term Incentive plan (LTI).

Boy those Contact shareholders sure are generous!

Fair enough, you deserve the free shares for doing a good job, but Baldwin has cost the company 10s of millions in lost revenue over the last year and since he has become the MD this year he becomes ineligible to participate but has decided in his infinite wisdom that he will apply to his mates at the NZX to waive this rule that allows him to participate.

And guess what, the waiver was granted just 24 hrs latter.

Beam me up Scotty, I wanna be where Dave lives, 'cause it don't work that way down here on earth.


Recent Share Investor Reading

Discuss Contact Energy @ Share Investor Forum


Related Amazon Reading

How to Run Successful Employee Incentive Schemes: Creating Effective Programs for Improved Performance
How to Run Successful Employee Incentive Schemes: Creating Effective Programs for Improved Performance by John G. Fisher
Buy new: $37.53 / Used from: $32.87
Usually ships in 24 hours

c Share Investor 2009