Chairmen take share regardless of results

The role of chairman of a board of directors is normally a part-time position, yet the chairmen at some of Western Australia’s biggest companies earn more than most chief executives.

Foodland Associated’s Len Bleasel, who has been busy over the past year dealing with the planned break-up of his business, earned the highest income of any non-executive chairman last financial year with total income of nearly $470,000.

He was followed by the chairmen of WA’s two biggest public companies: Woodside’s Melbourne-based chairman Charles Goode, who earned earned $427,757, and Wesfarmers’ Trevor Eastwood, who earned $411,000.

Paladin Resources’ Rick Crabb was one of the top paid chairmen, but only because he was granted share options valued at $299,718. His base fees were a very modest $26,150.

Paladin is one of the few larger companies to grant share options to its non-executive directors.

Other companies continuing this practice include Mt Gibson Iron, which awarded chairman Bill Willis share options worth $29,230, and Clinical Cell Culture.

Most companies have a very simple remuneration structure for their non-executive directors, comprising a base fee and superannuation.

Most companies also state that, in contrast to executives, remuneration for non-executive directors is not tied to the company’s performance.

An exception to this pattern is Iluka Resources, where most of the non-executive directors participate in a share acquisition plan, which is tied to the company’s total shareholder return.

Several companies have introduced a scheme where non-executive directors are able to receive part of their income in the form of shares.

Examples include Woodside, where Mr Goode took just over half of his total income of $427,757 in the form of shares, and Tap Oil, where one-third of directors’ fees are used to buy shares on market.

Hardman Resources’ Alan Burns was another highly paid chairman.

His base fee for the 2005 calendar year is $280,000 and he is also entitled to a retirement benefit equal to three times his final annual base fee, which would be $840,000.

Some directors have substantially boosted their income by providing consulting services.

Clough chairman Jock Clough earned $113,054 in consulting fees on top of his base income of $189,300.

Consolidated Minerals’ Colin Smith earned $134,075 in consulting fees, Perilya chairman Phillip Lockyer earned $163,750 for technical services, while Clinical Cell Culture’s Dalton Gooding earned an extra $76,050 for work “over and above normal duties”.

Mr Gooding is one of several prominent directors who hold multiple board positions, notwithstanding the concern over more onerous corporate governance rules

His other board positions include chairman of the West Coast Eagles and Gateway Capital, and director of Sipa Resources, Australian Wine Holdings and St John of God Healthcare.

Warwick Kent is chairman of two substantial local companies, WA Newspaper Holdings and Coventry Group, and is a director of Commonwealth Bank and Perpetual.

Tony Howarth is chairman of Alinta, Home Building Society and St John of God Healthcare.

Perhaps the most prolific Perth-based director is Peter Mansell, who sits on seven company boards, including as chairman of Melbourne mining company Zinifex.