The directors and top managers of TGA pay themselves too much. I have held shares in a small cap, FFI, for many years. Its net equity is about $36m, and its market capitalisation about $50m. It had three directors in FY2018 Also, TGA uses external resources to do what FFI does internally. I am not suggesting that TGA could realistically remunerate the guys at the top to what FFI pays, or that the work required is comparable, but the gap is too big for a team running a company that is going backward. The information below relates to FFI for FY18.
If the tables below look odd because of line overflow, shrink the font size.
Directors
Rodney G Moonen . . . . . Chairman – Executive Director [also Company Secretary]
Geoffrey W Nicholson . . Managing Director of Subsidiary – Executive Director
Robert D Fraser . . . . . . .. Non-Executive Director
Other Key Management Personnel
Brett R Matthews Group General Manager
Robert G Strong Managing Director of Subsidiary – Executive Director
Key Management Personnel Remuneration Table (FY2018)
. . . . . . . . . . . . . Salary .. Super . . Non- . . Long term . Other . Total
. . . . . . . . . . . . . . and . . . . . . . . . Monetary .. Benefits
. . . . . . . . . . . . . .Fees . . . . . . . . . Benefits . . . . LSL
R G Moonen ... 139,000 .. 23,000 . . . . . . . . . . . . . . . . . . . . . . 162,000
G W Nicholson 169,102 .. 25,000 .. 13,535 .. 2,962 .. 1,205 .. 211,804
R D Fraser ........ 36,530 .... 3,470 . . . . . . . . . . . . . . . . . . . . . . . 40,000
B R Matthews.. 176,048 .. 23,951 . . . . . . . . . 3,044 .. 3,844 .. 206,887
R G Strong ...... 127,186 .. 22,814 . . . . . . . . . 2,283 . . . . . . . . 152,283
Total ................ 647,866 .. 98,235 .. 13,535 .. 8,289 .. 5,049 ..
772,974
Rod Moonen is a substantial shareholder, and dividends are good, so he pays himself a modest salary, although he holds three positions. FFI's non-executive director cost was $40,000, and TGA's was $603,565. The total for directors and senior management for FFI was TGA was $772,974, compared to TGA's $3,934,472.
My opinion is that TGA should pare down the size of its non-executive directors, and let Peter Forburg run the company for the rest of TGA's financial year ending 31 March 2020. By then, hopefully, the Class Action will have concluded.
On the Class Action, the recent judgement in favour of Westpac in the ASIC-versus-Westpac saga is very heartening – see
https://www.abc.net.au/news/2019-08-13/westpac-asic-responsible-home-lending-case-banking/11407742. That Westpac had caved into ASIC makes the judgement most remarkable. ASIC is populated with do-gooders, which by definition means that their sanctimonious actions do more good than harm.
