DENNIS CHIEF SPEAKS IN ROW OVER DIRECTORS
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DENNIS Brothers Ltd. shareholders were asked this week by chairman Mr. A. R. Stewart not to sign proxies to Colonel D. S. E. West authorizing him to vote against the reelection of directors.
For, says Mr. Stewart, an "unknown number" of shareholders have received a circular from Col. West (dated January 19) complaining of arrangements made in June for the remuneration of board members who are also Dennis employees.
And, says Mr. Stewart, five of the circular's six paragraphs contain "mis-statements of fact of which Col. West should have been aware". Stripped of these mis-statements, the arguments he advances are two:—
First, that their profit participation should be related not to profits they enable the company to make but to the proportion the company distributes in dividends. Secondly, that they should not share in profits over £50,000 but wait until profits of £300,000 are "in sight" and then ask shareholders if they are prepared to be generous.
Mr. Stewart says that, ignoring directors' fees which are fixed by the articles, basic salary for management services payable to the four full-time directors will average £3,750 a year— well below the market price for men of their capacity.
"They could not be expected to accept a low salary in the circumstances of this company a year ago and still have no assurance of reward if the company does well.
"In those circumstances I was and still am satisfied that the agreement to leave the salaries at low basic figures and offer a profit participation commencing at a low figure was very much in the interest of the company. It also reflects the confidence of these men in the future of the company.
"Any attempt to renegotiate the agreements will probably result in greater not less cost to the company."
Mr. Stewart says that with regard to the "complaint" that directors' remuneration will rise from £18,585 to £21,000, the facts are that no individual increase has been given except £500 a year to Mr. Stacey on his promotion to general manager and the balance is due to the appointment of Mr. Emmet as marketing director.