The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An outspoken Bank of the Bahamas shareholder has demanded that its directors’ fees be cut by 50 per cent, branding them as “excessive given that the bank loses oodles of money”.

Dionisio D’Aguilar was among 20 minority investors who staged a mini-shareholders’ revolt at Friday’s contentious annual general meeting (AGM), voting against the total $330,000 compensation that non-executive Board members will receive in the 2015 financial year.

That works out to an average $41,250 per person, given that there are currently eight non-executive Board members, a figure Mr D’Aguilar suggested was double the average director’s fee in the Bahamas.

Mr D’Aguilar, who as chairman of AML Foods knows from where he speaks, said he received just $19,000 per annum (split into a $15,000 fee, and $1,000 each for four Board meetings) for heading the BISX-listed food retail group.

And he contrasted AML Foods’ policy of breaking down Board fees, showing what the chairman earned separate from that of other directors, with Bank of the Bahamas’ approach, which does not.

“The directors’ fees are excessive given that the bank loses oodles of money,” Mr D’Aguilar told Tribune Business, explaining the rationale for the AGM protest by disgruntled minority investors.

“For a bank that is haemorrhaging money, writes-off $69 million in loan loss provisions, had a $40 million accounting error, and the directors are among the best paid in the country, it’s scandalous.

“It [the directors fees] should be cut by 50 per cent. Most directors in this country make between $15,000-$25,000 a year.”

Tribune Business understands that other shareholders who voted against the directors’ fees for 2014-2015 included Dr Johnathan Rodgers, the well-known eye doctor; former Registrar General, Sterling Quant; and Mike Lightbourn, principal of Coldwell Banker Lightbourn Realty.

The shareholder revolt, which saw a similar number also vote against the Board appointments, in reality achieved very little - at least in the short-term.

While the minority investors made their views plain on a year in which shareholders suffered an almost-$69 million net loss, the Government’s majority control meant their opposition did not have even a remote chance of succeeding.

Via the Treasury and National Insurance Board (NIB), the Government controls 51 per cent of Bank of the Bahamas’ ordinary voting rights, and 65 per cent of its total equity.

Mr D’Aguilar, meanwhile, said that while Bank of the Bahamas might try to compare its directors’ compensation to that paid by Commonwealth Bank, the reality was that there was no comparison as the latter churned out a steady $40-$50 million per annum in annual profits.

“The Board should have taken a cut in pay,” he reiterated. “Clearly, I’m on the wrong Board.”

Paul McWeeney, Bank of the Bahamas’ managing director, told Tribune Business that the directors’ fees were determined by the majority shareholder that appointed them - the Government.

“That’s above my pay grade,” he told this newspaper, when questioned on the issue. “I can’t comment on that. It has nothing to do with the managing director.

“The directors’ fees have come down considerably between this year and last year. That’s for the major shareholder, not for the managing director.”

However, Tribune Business calculations raise questions about Mr McWeeney’s assertion that directors’ fees have “come down considerably”.

While the total $330,000 approved for the 2014-2015 financial year appears, at first sight, a significant drop on the $450,000 and $457,166 approved for Bank of the Bahamas’ previous two financial years, this is only because the Board has now been reduced in size by three.

The current Board is eight, compared to the previous two, which featured 11 members. When the average fees approved are calculated, these work out at $40,909 for 2012-2013 and $41566 for 2013-2014 - figures very much in line with the $41,250 average for this year.

However, in fairness to Bank of the Bahamas, its directors’ fees paid out in 2012-2013 were under-budget by 33.5 per cent compared to what was approved, coming in at just over $299,000 as opposed to $450,000.

Apart from chairman Richard Demeritte, the other seven directors serving on Bank of the Bahamas’ Board are Alexander Reckley, Donna Harding-Lee, Don Davis, Errol McKinney, Eric Gibson Jnr, Bishop Roston Davis and Renae McKay.

Ms McKay is thought to have replaced Father James Moultrie as NIB’s representative, while the Government has elected not to replace attorneys John Wilson, Rawson McDonald and Roger Minnis.