NZX chief executive Tim Bennett to step down

NZX chief executive Tim Bennett has announced he will step down at the end of the year.

Mr Bennett took over as head in May 2012 from Mark Weldon, with an initial contract for five years.

The stock exchange operator’s board is searching for a new chief executive, to start at its new financial year at the end of December.

NZX chairman James Miller says Mr Bennett has been a “transformational leader” in a positive era for the company and New Zealand’s capital markets.

“Since Tim took the helm in 2012, he has successfully repositioned NZX’s strategic direction, ensuring NZX can take advantage of future growth opportunities in the markets. On behalf of NZX stakeholders and staff, the board sincerely appreciates Tim’s hard work, dedication and intellectual rigour.”

He says it will be “business as usual” until a new chief is appointed, and the board will carry on the direction of the business put in place over the past few years.

Mr Bennett says he is proud too have overseen change and built a strong team.

“It has been an intensive four years of change that I have led NZX through and with that process largely complete, I’ve decided that the end of the year is the right time for someone else to drive the next phase of growth.

“… Our markets business has been rebuilt and now provides a strong platform for growth from a stable cost base, for the benefit of our shareholders and the broader market, with businesses now seeing NZX as an attractive means to access capital.”

During his tenure, NZX built up its funds services strategy, acquiring SuperLife, launching exchange traded funds and partially restructuring its agri-business section. It launched the NXT market, which has four stocks trading on it.

Litigation, declining profit

There have also been legacy issues Mr Bennett has had to oversee, including the expensive and long-running court case saga between NZX and the sellers of the Clear Grain Exchange. NZX’s first-half profit dropped 80% as costs related to the Ralec litigation offset gains in operating revenue.

Net profit fell to $3.58 million in the six months ended June 30 from $17.9 million a year earlier, which had been bolstered by a one-off gain on an asset sale.

NZX spent $2.9 million on the Ralec trial in the first half of 2016, more than twice what it spent in the same period a year earlier.

Will he get a bonus?

Mr Bennett has a chief executive share scheme in place that runs for a five-year period until August 2017. NZX confirms this scheme will remain for its scheduled duration.

If over the period of the scheme, NZX’s total shareholder return exceeds 1% over NZX’s weighted average cost of capital – which is determined annually by the board – Mr Bennett will receive a taxable bonus equivalent to the amount of the loan, and the shares will be transferred on full repayment of the loan and any accrued interest.

If the hurdle rate is not met then, when the scheme expires, Mr Bennett will not receive the bonus and must repay the loan from his own resources, and will receive a transfer of shares.

For the purposes of determining the hurdle rate, the initial 2012 issue price will be set at $1.10. NZX had previously indicated the issue price was $1.19.

NZX previously said it expected 2016 earnings before interest, tax, depreciation and amortisation to be in the range of $22.5-26.5 million. Today it revised that to the lower end of that range, due to costs associated with the restructuring of the agri businesses and the chief executive transition.

NZX’s share price has risen 13% in the past 12 months and is at $1.05 this morning.

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