Our most recent review of Australian and New Zealand Non-Executive Directors’ fees reveals that while the New Zealand economy has recently been significantly challenged, Directors’ fees for the country’s top 50 listed companies have increased well above those for Australia’s top companies year-on-year.
Chairmen and Directors of New Zealand companies are paid at a significant discount to their Australian counterparts, even taking into consideration the smaller size of New Zealand companies. New Zealand’s top 10 corporations have a market capitalisation profile broadly aligned with the second 50 on the ASX, whereas the next 40 companies are not significantly out of step with those ranked between 200 and 250 on the ASX.
In our judgement, the recent uplift in New Zealand fees is in part reflective of the abovementioned discount and the desire of an increasing number of New Zealand companies to increase their international Board membership. This is occurring as New Zealand companies, like Australian organisations, develop significant presence in export markets or pursue low cost operations overseas.
We would anticipate that with the New Zealand government endeavouring to privatise a number of their commercial enterprises, fee pressure will continue in New Zealand in the coming twelve months.
Our comprehensive research on both Australian and New Zealand Directors’ fees is set out in our August 2013 KMP Report.