murchison seeks vote for options bonuses

Murchison seeks vote for options bonuses

MURCHISON Metals executive at the centre of the company's legal battle with Chameleon Mining is in the running to receive a bonus of 4.5 million share options, despite receiving a 42 per cent pay rise last year.

Murchison shareholders are being asked to approve the grant of options to executive chairman Paul Kopejtka and managing director Trevor Matthews when the company hosts its annual meeting in Perth next month.

The two options packages, which have theoretically been valued at $2.1 million each, come after Mr Kopejtka's salary jumped from $354,000 to $501,000 last financial year. Mr Matthew's pay packet rose 53 per cent to $545,000.

According to Murchison's notice of meeting lodged on Friday, the options are designed "to provide a cost effective and efficient reward, incentive and retention mechanism for the ... executive directors at a time when the company is approaching critical milestones in the development of its key projects".

As a result, the vesting of the options has been linked to the company's progress relating to its Jack Hills iron ore project and the Oakajee port and rail project.

Mr Kopejtka, who has refrained from making a recommendation on the options deal, was one of several witnesses to appear in the Federal Court last week, where his company is defending a legal claim by Chameleon over its iron ore tenements.

Chameleon, which is chaired by former rugby league player Benny Elias, has alleged that former Murchison director Philip Grimaldi and former Chameleon director Greg Barnes improperly arranged share placements so Murchison could purchase its iron ore tenements in Western Australia. It now wants a cut of the $800m venture.

Among the evidence to emerge in court was a secret deal that involved Mr Grimaldi and Mr Barnes sharing in 10 million shares following a takeover deal in 2004. The issue was not included in a bidder's statement to shareholders, and Mr Kopejtka, who was not a Murchison director at the time, was quizzed about his knowledge of the deal.

"I can't remember exactly ... I would have been aware, I guess," he said.

Murchison, as well as Mr Grimaldi and Mr Barnes, is defending the claim. The dispute, however, has had little impact on Murchison's share price, which has more than doubled this year to $1.62, although it is still a fair distance from its pre-financial crisis high of $6.02.

Mr Kopejtka's own shareholding is worth $32.4m.

Murchison claims its board has sought advice on remuneration, which has determined that the base salaries of its executive directors are generally below those at comparable companies.

"However, due to the current economic climate, the board does not believe it is appropriate to increase the base salaries of its executive directors at this time," the notice of meeting says.

"However, the board is of the view that (they) should be provided with appropriate performance incentives comparable with the company's peers."