22.07.2009

Verticon doubles CEO pay as it struggles to survive

Verticon, the company that quit the crane and hoist business earlier this year has been highly criticised for paying is CEO a massive bonus while it teeters on the edge of insolvency.

The debt laden property developer paid its chief executive Andrew Torrington a cash bonus of A$573,832 around half the company's market cap’ almost doubling his total remuneration to A$970,307.

This in spite of the fact that its auditor PricewaterhouseCoopers expressed "significant uncertainty" over the company's ability to continue as a going concern, Verticon reported a A$17.5 million loss for the year on revenues of A$39.5 million.

This compares favourably to last year when the company lost A$59.5 million on revenues of A$46 million (yes you read it right).
The year before that it lost A$9.5 million in fact Since it was listed in 2004 at $1.20 a share, the company has accumulated losses of $83 million and its shares have slumped to just 1¢ each.

Verticon non executive chairman Noel Henderson, (paid A$139,000) defended Torrington’s bonus, which he said was an "incentive" for his sale of the group's crane business for $12 million to D&G Hoists and Cranes in April. The sale was well below book value and resulted in a A$10 million loss to the business.

Henderson said that Torrington had sold the business at "some considerable personal effort. It was fundamental to the strategy that the board had set in terms of quitting the crane and hoist business and being able to move into the long-term aim of being involved in property development."

Both Henderson and Torrington are ex employees of Multiplex the Australian contractor which built Wembley stadium in London.

Vertikal Comment

None of the senior managers that set up or managed Verticon since its inception had a clue about the crane or hoist business, all coming from the financial side of the construction or oil industries. Having kicked off with the acquisition of Seca hoists and Econ cranes the business simply burnt its way though bank and shareholders funds, making mistake after mistake.

The only thing the business appears to have been adept at doing was paying the senior management grossly excessive salaries. Having failed at the crane and hoist business the rump of the management is now focusing on property development regardless of the fact that it has no funds to invest.