Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Diligent discloses staff share option blunder

Diligent discloses staff share option blunder

By Pam Graham

Jan. 18 (BusinessDesk) - Market darling Diligent Board Member Services is tidying up the way it grants share options to employees after finding it granted too many options to senior staff and did not provide a prospectus to others.

The company, whose board members include former NZX boss Mark Weldon, has embarrassingly had to advise NZX and the Financial Markets Authority of the breaches.

BusinessDesk understands that an investigation by a special committee of the board came about after the company was targeted by a US law firm, essentially a legal bounty hunter, looking for a fee for discovering the breaches.

Chairman David Liptak declined to comment on how the company first became aware of the issue but said it was working with authorities to resolve it.

Weldon is a member of the special committee and was not on the board when the breaches occurred.

The special committee has found that awards of stock options to chief executive Alessandro Sodi in 2009 and 2011, and a 2011 award to another employee exceeded caps in incentive plans operating at the time.

The options in excess of the caps will be cancelled and another way will be found to compensate the executives.

A number of smaller option grants to employees in New Zealand were also made in the absence of a prospectus and this "was not, or may not have been" in compliance with New Zealand regulations. The options were free.

The Financial Markets Authority (FMA) said it was working with the company to establish whether a breach occurred.

"The special committee determined that these instances of non-compliance were inadvertent," the company said.

Diligent is listed in New Zealand and its shares were down 0.9 percent at $5.50 in afternoon trading, having hit an all-time high of $5.61 earlier this week on strong annual revenue growth figures.

Because the company is incorporated in Delaware with over 500 shareholders, it is subject to the US reporting and regulatory requirements of the Securities and Exchange Commission (SEC) and the Securities Exchange Act of 1934.

The company said that it struggled with complex regulatory and compliance obligations in multiple jurisdictions with different rules during a period of financial difficulty and constrained resources in the years following the listing on the NZX in 2007.

"While the special committee's work continues, all regulatory issues identified will be fully self-reported to the NZX and FMA," the company said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news