Austar’s earnings and director’s pay jumps
May 29
Better than expected earnings and a positive first quarter from regional subscription television provider Austar have been overshadowed by a shareholder backlash towards the company’s plans to increase directors’ pay packets.
Over half of the shareholders not associated with the 54 percent major shareholder Liberty Global either voted against or abstained from voting on the company’s remuneration report at the Annual General Meeting held yesterday in Sydney, after Austar revealed in the lead-up to the meeting that the salary paid to CEO John Porter had jumped 43 per cent to $5.2 million.
The increase is due to the share-based pay incentive scheme that pegs salary to growth in earnings before interest, tax, depreciation and amortisation (EBITDA). Austar’s EBITDA growth has been in double digits for the past three years, however profit after these factors has fallen.
While the chair of the remuneration committee, Tim Downing, maintains that EBITDA is the best measure for the scheme, he said the company will look at alternatives after the current plan expires in two years time but has ruled out changes prior to the plan’s expiry:
“The long-term incentive plan was put in place in 2006 and to some extent the world has moved on, so the concept we have been talking about to major shareholders is they would like to see more recognition of free cash flow,”
“That would mean taking into account items that are below EBITDA that impact the resultant free cash flow of the business.”
Meanwhile, customer criticism of Austar’s MyStar personal digital recorder continues to grow with customers in Jindabyne yet to receive or record digital free-to-air channels through the unit – a major selling point for the product. One resident told the Summit Sun that he has been waiting for a resolution to the issue since August. Austar wrote to customers in April advising that due to changes in the information provided by the free-to-air networks, changes were required to the software contained in the MyStar units in order to receive the signals with no indication of when the process will be completed.
Source: The Australian, Summit Sun
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bacco|007 May 29th 2009