Alf can be bewildered by the boardroom antics of our company directors and their executives.
He can be puzzled, too, about the business press’s disinclination to look too hard at their more questionable decisions.
Take – for example – the decision to pay Air New Zealand chief executive Rob Fyfe an increased cash bonus for his performance during the past financial year.
Although his base salary remains frozen at $1.2 million, his short-term bonus for the 2008-2009 year will increase from $287,100 to $1,240,800. That will be paid next year.
Good for Rob.
But has he done good things for shareholders (a big chunk of them are taxpayers, via the government’s stake in the company)?
Not that Alf can see.
The airline yesterday reported an adjusted profit of $118 million. Although that is down 19 per cent on the previous year, it is among a small group still in the black.
So the profit slumps, but Rob’s bonus increases?
How does that work?
Chairman John Palmer said Mr Fyfe had outperformed his targets, which were not based just on comparing year-on-year financial performance by Air New Zealand, but comparison to other carriers. Leadership, strategy development, balance sheet strength and dividend flow are also taken into account.
Mr Fyfe was paid a total of $3.09 million following the 2007-2008 year and $2.28 million from the past year.
He said with the addition of long-term share incentives that could top $3 million in next year’s figures.
We hear a lot of hollering from news media about MPs with their snouts in the public trough.
But is there much difference between what they get up to and the warping of the meaning of “performance” to generate huge bonuses for the likes of Rob Fyfe?