Chemeq Faces Ire Over Pay

The Age

Tuesday November 30, 2004

By MICHAEL WEIR PERTH

CHEMEQ founder and executive chairman Graham Melrose was forced to defend his $600,000-plus salary yesterday as he fronted shareholders after a tumultuous year for the veterinary drug company.

Top 20 shareholder Gary Branch said Dr Melrose's salary was "completely out of sync with the current state of development of the company" and offset recent efforts by Chemeq to cut costs.

Shareholders also quizzed the company over plans to increase the pool available for non-executive directors' fees to $430,000 from $220,000, saying the company should make money and pay dividends before increasing fees.

"I believe shareholders look at directors who want more and more and more as like politicians - they don't like it," one shareholder said.

But Dr Melrose said directors' fees were "normal and responsible" and Chemeq would not have achieved what it had without the work of directors. He also said his salary was determined by the company's remuneration committee.

"My salary is commensurate with standards of remuneration in Australia, full stop," he said.

Dr Melrose's total salary package jumped 50 per cent in the 2003-04 financial year to $614,796, including a $22,936 cash bonus.

Shareholders have seen the value of their holdings more than halve in the past year.

Chemeq has been hit this year by shock revelations of a big blow-out in construction costs at its Rockingham plant and concerns about its sales contracts and dwindling cash.

Dr Melrose told shareholders he shared their disappointment.

But he said the Rockingham plant had started producing the company's patented polymeric antimicrobial product. Chemeq shares closed 9 ? lower at $2.05. West Australian

© 2004 The Age

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