Friday, June 18, 2010

John Palmer Tipples on the Shareholder

Air New Zealand Ltd [AIR.NZ] chairman John Palmer has decided to side with the politicians over the great credit card swindle of New Zealand taxpayers.

Good on him for openly declaring his indiscretions but shareholders and taxpayers shouldn't be paying for John's tipples after work.

John reckons:

mini-bar bills are "just part of commercial life".
The professional director said yesterday that he felt sorry for some MPs over criticism received for claiming expenses such as alcohol in hotel rooms.
"I've got a good deal of sympathy for some of them, as someone who travels a fair bit and who does actually have a beer out of the hotel fridge and puts it on the hotel account, and spends a huge amount of time away."
Often hotel rooms were places of work, where staff made progress on decisions with colleagues or guests, Mr Palmer said. "That's just part of commercial life." Read More at
Mr Palmer is also a director of AMP Ltd [AMP.NZ] Rabobank in this part of the world and Chairman of State owned miner Solid Energy.
I would argue that Mr Palmer has breached a line when he considers that shareholders and or taxpayers should be footing the bill for his alcohol indulgence.
Alcohol is definitely personal spending and at minibar prices shareholders are getting an even rawer deal. Have you checked out the price of a minibar Mars Bar recently!
Am I being petty?
Maybe, but I think spending like this shows a contempt for those employing you and paying your wages and a culture of waste, especially evident at Air New Zealand and Solid Energy.
Shareholders in Air New Zealand and AMP should get in contact with the respective investor Centres and let them know they are not happy with John's free spending.
You should be annoyed with John and his attitude. It is your money that he is wasting and as shareholders and taxpayers you deserve much better.
It is indicative of further waste.
Air NZ Investor Centre
AMP Investor Centre
Solid Energy

Recent Share Investor Reading

Discuss this Topic @ Share Investor Forum

Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions)Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions) by Benjamin Graham
Buy new: $41.77 / Used from: $33.50
Usually ships in 24 hours

c Share Investor 2010


  1. Rob Fyfe was nice enough to reply to the above on his facebook page:

    Rob Fyfe commented on your link:

    "Actually Darren, when I see a headline like that alongside the photo used, my first thought is one of what a gross distortion and unworthy of any comment.

    Howver my philosophy is pretty simple - when staff are travelling on company business, we should provide them with the same basic standard of living while away that they would enjoy when at home.

    In other words if people belong to a gym at home and there business travel precludes them using their membership we should provide access to a gym. If they would normally have a glass of wine at home with dinner, it is reasonable that they have a glass of wine with dinner if they are away from home on business - or a beer.

    I do not believe, as this article seems to suggest, that if an employee or director is away from home on company business, that they should be expected to foot at their own cost, expenses that they would not occur if they hadn't been performing this function on behalf of the company.

    When I look at the demanding schedule John operates, I think shareholders get incredibly good value for money with or without a $5 bottle of beer.

  2. Thanks for your considered reply Rob. I can almost stomach shareholder/taxpayer funds used during working hours but to have dinner or a gym membership and other personal expenses on me is a no no.

    Keep the personal and business expenses separated. If they are not all spending will be under question.

    The photo is a homage to AIR NZ's own fondness for nudity and naughtiness.

  3. "There we differ Darren, if someone has paid $100 a month for a gym and I require them to travel off-shore denying them the ability to utilise their membership and force them to pay again off-shore to maintain their gym membership, or expect them to have no food or drink until they return home, I would not only have all my managers up in arms but also my entire cabin crew and pilot population. We give our crew an allowance to cover these issues and require our managers/directors to furnish receipts for reimbursement. "

  4. We are talking about different things here Rob and you are getting a bit silly - nobody would deny food and drink. I and most others (in business and working for others) have a distinction between what is personal and what is business.

    If you are eating during work hours and or conducting work business(away from home so you cannot easily return ... See Morethere) I have no problem for reasonable expenses being charged to the company.

    After work or during personal times your own wallet should come out, whether you are away from home or not.

    This is a clear and unequivocal distinction.

    Anything else is simply stealing from those that employ you.

  5. Darren, back to the start - the question was whether John overnighting on company busienss is entitled a drink in his hotel room. You then stated he is not entitled to dinner, use of a gym, or I assume the beer, which is what he would be no doubt doing if he was at home. Then you say food and drink is OK and its obvious what is personal - well you've certainly managed to confuse silly old me!!

  6. Rob, you knock off work even when you are traveling on business and then that time becomes personal time and then the company meter gets turned off.

    I guess you have to trust your staff to use discretion and it looks like John doesn't use his.

  7. "OK Darren, what you suggest would destroy our business - all our flight attendants, pilots and managers are given allowances to cover incidental costs, food and drink when they are offshore and aoff duty or outside working hours - this is consistent with all other airlines I know, all other corporates I know and is common sense.

    I don't mind you coming on my personal facebook page and calling me silly, I do find it offensive that you now choose to characterise a man you don't know who works tirelessly for Air New Zealand as indiscreet. Not what I expect of those that wish to be my friends on facebook

  8. Rob had a hissy fit and "unfriended" me on his Facebook page.

    I will answer his last comments here then.

    I have no problem with pilots and flight attendants with allowances,(which are limited)booking up costs. That is clearly legitimate. What I do have a problem with is the attitude of John Palmer that it is OK to raid the minibar on the shareholder or taxpayer moola and that goes to attitude to its owners, your fellow taxpayers of Air NZ and shareholders of the company.

    Rob is merely trying to confuse a very simple issue by specious arguments comparing legitimate pilot and attendant allowances with the personal spending of employees such as Mr Palmer on the company checkbook.

    It must be noted that these legitimate expenses have been cracked down on over the years Rob has been at the helm if Air NZ with resultant industrial action by staff. Shame the same frugality doesn't apply to directors and "senior staff".

  9. Hi Darren,

    You are harsh but I agree with you in principle, 100%
    You have to draw the line somewhere. right.
    3 meals a day plus refreshments is the norm so no issues there, but access to a gym, that is like if I would often ride a mountain bike when in NZ it would be ok for me to go and hire a mountain bike while on a company trip and charge it to the company. I don't think so. Or if my Wife sometimes gives me a massage I should also get one when on a work trip - no no no
    Where does it stop?

    Nice grilling by the way !

  10. Ahh, I knew someone would agree with me :)

    I don't think I am being hard though RJ. Just fair.

    Fyfe and Palmer believe in a open bar.

    Interesting how other CEOs would see this issue...


Comment on Share Investor Stuff