New Zealand: Listing Rules - proposed changes regarding capital raising and directors' remuneration

The New Zealand Stock Exchange (NZX) has issued a consultation paper setting out proposed changes to the Listing Rules governing the NZSX, NZDX and NZAX markets. The majority of these changes concern capital raising but some concern corporate governance.  Of interest is a proposed change concerning directors' remuneration which would permit directors to be remunerated in shares. The justification for this change is explained as follows (p. 10):

NZX believes that the issue of stock as a means of remuneration should be promoted. This would assist Listed Issuers to align management and shareholder interests more closely, and give firms that are potentially cash constrained more flexibility in the way they remunerate Directors. Any such arrangement would need to be approved by shareholders. The current rule relating to Director remuneration (Rule 3.5.1/ NZAX Rule 3.4.1) only contemplates Directors’ remuneration being paid by way of a monetary sum and makes no provision for the issuing of shares. For firms that may be cash constrained, flexibility on the type of remuneration paid is important. This Rule should be changed to allow firms to pay Directors, who so elect, in stock if approved by shareholders".