He apologised to shareholders for mistakes made as a result of its project pipeline growing in a small space of time. “Responsibility ultimately rests with the Board. As we stated at our full-year results briefings, we fully accept this responsibility."
Directors however had resolved to hold on to at least 20,000 of their shares while on the board, Stuff NZ reported.
The company’s buildings and interior business unit is seen to incur additional losses of 160 million in the year to the end of June.
Fletcher Building, whose shares were on trading halt Tuesday, said 80 percent of the loss was due to cost overruns on SkyCity’s New Zealand International Convention Centre (ICC) and the Christchurch justice and emergency services precinct.
Strict confidentiality clauses in their contracts prevented the company from naming these projects earlier, but the clients had agreed to make an exception “in the face of these extenuating circumstances and shareholder demand,” Norris said.
The shareholders responded to pay cut announcement through muted clapping.
"Your penance seems appropriate and your confession seems sort of complete," said activist shareholder Bruce Sheppard, who came to the meeting dressed as a priest.
The loss estimates were disclosed after a review by KPMG
, even as the results would not be made available to shareholders, the company said.
Other projects reviewed were the Auckland office and retail block Commercial Bay, and two infrastructure projects, the Warkworth to Puhoi and the Hamilton City Edge Expressway.
Norris admitted the company learned several lessons from their mistaken decisions.
“There were a number of failings within the core capabilities of the Building and Interiors business, across a range of projects,” Norris said.
“This included bid strategy, project planning and resourcing, commercial judgment around the pricing of risk, and the management of consultants.”
Labour scarcity in the broader sector and the company’s rapid growth stretched Fletcher’s project management resources.
The complex projects were neither managed nor priced effectively.
Norris said they were undertaking measures to rectify their mistakes.
“We have strengthened our governance, processes, systems and talent across the board," he said.
The company is now also more selective about the projects it bids for.
A new chief executive, Ross Taylor, will assume leadership on November 22. Taylor has had extensive experience in engineering and construction and is known for leading business turnarounds.
Fletcher loses HR boss to BNZ
Far out Friday: CEO raises minimum wage to $70,000 by slashing own salary
Directors of Fletcher Building are taking a pay cut in the next 12 months, its chairman Sir Ralph Norris told shareholders at the firm’s annual meeting this week.