Even after all these years, John Alexander, or JA as he’s known to some in the media, is about to get very much richer: by more than $28 million over the course of this financial year, and that’s in addition to his existing salary and shareholding in PBL.

The notice for that meeting on October 26 reveals that shareholders will be asked to ratify the granting of shares under the executive share scheme to deputy chairman, Chris Anderson (300,000 shares), the head of PBL’s Gaming Division, Rowen Craigie (850,000) and the CEO of PBL, John Alexander, 1.3 million shares.

The grants have already been disclosed by the company and there is an additional payment of more than $5 million to Alexander. Alexander received 300,000 PBL shares, like Anderson and Craigie last February. The scheme was re-started two months after Kerry Packer died.

The company loans the money to the executives and the interest charged is set to be matched by the dividends paid on the shares. Alexander and Craigie received an extra one million and 500,000 shares respectively on August 30 to make up for changes to their deferred compensation scheme agreed to at the end of 2004.

Here’s the explanation for the Alexander payment:

On 23 February 2006 the Company agreed to allot 300,000 ESP shares to Mr Alexander at an issue price of $16.16 per ESP share. These shares form part of a further long term incentive put in place to reward Mr Alexander for his leadership of PBL. The Company’s agreement to allot these shares (subject to shareholder approval) was disclosed to the ASX on 21 March 2006.

Mr Alexander’s employment terms were advised to the ASX on 21 January 2005 and have been fully set out in the Remuneration Reports in the 2005 PBL Annual Report and the 2006 PBL Annual Report (see page 70).

Mr Alexander’s long term incentive comprises a deferred cash bonus based on the gain on a notional holding of 1,000,000 PBL shares issued at a price of $12.52. Subject to shareholder approval, on 30 August 2006 the Company agreed to allot 1,000,000 ESP shares to Mr Alexander at a price of $17.82 partly in substitution for the deferred cash bonus arrangement.

This resolution seeks approval for the acquisition of both allotments of ESP shares by Mr Alexander.

Additionally, though not requiring shareholder approval, the current value of Mr Alexander’s deferred cash benefit would be crystallised at $5,300,000 and this amount would be paid to Mr Alexander on 9 June 2007, being the third anniversary of his participation in the deferred bonus arrangement in the ESP.

This means that by the end of the 2007 financial year Alexander would have received shares and cash with a gross value of more than $28 million, plus the salary for 2007, which will not be known for a year but will be around $5 million.

That’s as much as David Murray, the 13 year CEO of the Commonwealth Bank received on his retirement last year, and was criticised for receiving too much money.

Alexander could make as much as Chris Cuffe received when he quit the CBA’s funds management division a few years ago. And Alexander still has several years more employment at PBL under his current contract.

He already owns just over 532,000 PBL shares (according to the 2005 annual report). At today’s price of $18.01 a share, they were worth $9.5 million and Alexander received dividends of more than $450,000 last year on that holding.

If the shareholders approve the deal (and they will because James Packer will vote his 38 per cent holding), Alexander will own more than 1.8 million shares with a market value of more than $32 million. That will earn him an extra $1 million a year in dividends.

Peter Fray

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