A PROPOSED retirement benefits scheme for directors of the Graziers Investment Company has been slammed by WoolProducers."It's inappropriate for the directors to discuss their own benefits before any information has been given to the shareholders regarding final distribution of entitlements,'' said WoolProducers senior vice president Geoff Fisken.
Mr Fisken continued.
The GIC was established in 2007 to administer, with an aim to winding up, those assets and liabilities of Australian Wool Services which weren't bought by Australian Wool Innovation.
While there were several valuable assets among the legacies there are also liabilities including commitments to a UK pension fund which serviced former employees of the International Wool Secretariat and the Woolmark Company.
Many of the problems and settlements have been addressed, although a wind-up might still be a year or two away.
GIC is reporting a total equity position of $17,928,000 for June 30, 2012.
Although this equity will change. The Indian bureaucracy is making it difficult to retrieve $5 million from the sale proceeds of a former Woolmark office in Mumbai.
On the positive side, GIC is earning interest on investments and the Laverton-based Anchor Tool and Press company in which GIC has a 60th per cent stake has been very profitable.
For their efforts, the four-member GIC board chaired by superfine stalwart Barry Walker has decided to propose a retirement scheme for themselves.
The retirement benefits would be additional to current directorship fees - Barry Walker ($122,833), John Patten ($119,900), Philip Attard ($56,274) and Robbie Sefton ($8720).
In the explanatory notes to its 36,000 shareholders - those who paid wool levies in the three years to June 2000 - the proposed retirements benefits, which needs shareholder endorsement, would "recognise the current directors' involvement and assistance in resolving the inherited legacy issues''.
The explanatory notes said the retirement benefits scheme based on a formula of years of service and current fees, would have cost GIC $307,727 or 15 cents of equity if GIC had been wound up in June.
That cost would rise each year it continues to operate.
"The explanatory notes described 'challenges and difficulties associated with its management of legacy issues', as justification for the payout. This was the job the directors' signed onto'', Mr Fisken said.
GIC's directors are not allowed to vote or cast proxies for the recommendation which will be decided at GIC's annual meeting in Sydney on November 26.
WoolProducers is urging shareholders to carefully consider their voting papers especially in terms of Item 3 and is recommending shareholders voting against it.