Former Fletcher construction boss Darlow forfeits stake when targets not met
By Rebecca Howard
July 14 (BusinessDesk) - Graham Darlow, who left his role as head of the Fletcher Building's construction division after it reported unexpectedly weak earnings this year, forfeited about $1.2 million of shares when he didn't meet financial targets.
Darlow forfeited 177,745 shares, retaining only 34,791 shares, according to a notice on the stock exchange. A company spokeswoman said the disclosure relates to shares he held under the company’s long-term incentive scheme and which he became beneficially entitled to under the terms of that scheme upon leaving the company. However, the shares were forfeited, as the financial targets associated with the long-term incentive scheme weren't met, she said.
Fletcher began a review of the construction division last November and its shares began dropping in late February when the unit unexpectedly posted weak first-half earnings because of some problematic projects. The stock took a second dive less than a month later when Fletcher cut its annual earnings guidance, largely because of issues with complex major building projects, wiping around $1.52 billion from the value of the country's biggest building firm.
The building company cut group full-year profit guidance by $110 million and said it expects operating earnings before interest, tax, and significant items to be between $610 million and $650 million in the year ending June 30.
When it lowered the guidance it also announced Darlow would retire at the end of the financial year, naming Michele Kernahan as chief executive of its troubled construction division, effective immediately. Darlow's departure ended a 29-year career with Fletcher. He joined the company in 1988 and has managed the construction division since November 2011.
Fletcher Building shares last traded down 0.1 percent $7.77 and have lost 9.7 percent over the past year, largely due to troubles in the construction division.