Incentives blocked at Trikona Trinity Capital

26th Jul 2010 17:52

Indian property investor Trikona Trinity Capital (TTC) has withdrawn two resolutions relating to directors' incentives from its EGM to be held on 30 July. TTC says that it has received shareholder support for incentivising Martin Adams and Pradeep Verma but the shareholders do not appear to like the original Directors' Incentive Plan. Adams and Verma have been spending a large part of their working time on TTC, which is longer than non-executives would normally spend on a company. The remuneration committee has decided that they can accrue consultancy fees. Adams is owed £642,500 and Verma £450,000 on this basis. That is not the problem, though. The incentive would have provided each man with a fee equivalent to 0.75% of any distribution made by TTC. If either man is removed from the board or the investing policy changed then they would still be entitled to up to 0.75% of total NAV in the form of shares. The idea was to encourage the early realisation of assets but shareholders must beleive it is too generous. There have been constructive suggestions about the precise terms of the incentive and the composition of the board. Shareholders will still be able to vote on changing the company's name back to Trinity Capital and the appointment of Indiareit Investment Management Company as its investment manager. Trikona's appointment as investment manager was terminated this year. A change in investing policy meant that the interests of the company and Trikona were not aligned. TTC has paid Trikona £41m in fees since April 2006. TTC is pursuing Trikona for damages because of breaches of the terms of the management agreement.