Shareholders back SkyCity directors' fee rise

SkyCity Entertainment Group shareholders have backed the casino operator's plan to hike annual directors' fees by 27 percent, or $200,000.

The increase, to $950,000 from $750,000, was approved thanks to the support of a resounding majority of shareholders who voted at today's annual meeting in Auckland. Some 136.6 million shares were voted for the proposal with just 17.5 million voted against. The increase is backdated to July this year.

The SkyCity increase comes after Contact Energy backed down last week, following strong shareholder opposition, from doubling its annual directors' fees to $1.5 million. Vector also pulled a plan to hike its directors' fees by 22 percent.

However, investment company Hellaby Holdings yesterday obtained shareholder support to lift its annual directors' fees by 50 percent to $375,000.

At its annual meeting SkyCity received little criticism from the floor over its plans for directors' fees.

Dr Brian Earnshaw was the only shareholder to ask why the company was hiking fees.

SkyCity, which has faced strikes from unionised staff seeking higher pay at its flagship Auckland casino this year, argued that although directors' fees were increased as recently as 2006, there were six non-executive directors on the board then and there are seven now.

No increase was proposed to the base level of fees for chairman Rod McGeoch nor the other directors. They would continue to receive $200,000 and $90,000, respectively, for their core roles.

"However, the workload and responsibilities of publicly listed company directors continues to increase both in terms of complexity and time commitment," SkyCity said in its notice of meeting.

SkyCity plans to increase fees for the director chairing its audit and risk committee by $15,000 to $25,000 and the director chairing its human resources committee by $5000 to $15,000.

Meanwhile, Earnshaw said he would not go so far as to call the increase corporate gluttony and arrogance as had been ascribed to Contact Energy, but asked whether it would not be more appropriate to reduce fees at this time.

Now that the number of non-executive directors had increased to seven from six, their workload would be reduced he said.

But McGeoch said if SkyCity wanted high calibre people on the board it had to pay, just as it had to pay for a high calibre chief executive.

"[Our] directors fees are in line with companies of our size," he said.

Meanwhile SkyCity chief executive Nigel Morrison, an Australian who worked in the casino industry in Macau before coming to New Zealand, was critical of New Zealand's bureaucracy.

"The regulatory hoo-hah we have to go through is bizarre," he said.

He said SkyCity wanted to attract newcomers to gambling with tables set aside for them to learn how to play the different games before putting real money on the table. But regulations prevented this move.

Morrison was cautious after the meeting about elaborating on the specific regulations he was talking about because he did not want to "get into trouble."

But he did say there was a lot of paperwork to do and approvals at government level took a long time.

"With some of the decisions you have to wonder whether they can't be made by another person," he said.

"Bureaucracy makes things very difficult. We can't turn around a gaming machine by 90 degrees without getting permission," Morrison added.

Separately, Morrison said Darwin was SkyCity's star Australian asset. He expected gaming business at the Darwin casino would receive a significant boost from a decision made by gas giant Inpex to build a $12 billion gas processing plant in 2010 and 2011 near Darwin instead of Kimberly in Western Australia.

The gas project will be so big that a tent city of 3000 is initially planed to house the construction workers.

And Morrison said he was "very optimistic" about the future of the company's cinema business which he said would undergo major restructuring though there would be no more capital expenditure put into the division in the coming year.

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