Fletcher Building's board will take a 20 percent pay cut as the building giant continues to struggle with losses in its building and interiors business.
The company slashed its full-year profit guidance today after a $160 million loss in its building and interiors section.
New Zealand's largest construction company said full-year underlying earnings would be between $680 million and $720m in the year ending in June, excluding the building and interiors ongoing losses.
The building and interiors business has already booked losses of $292 million in the previous year, related to the international convention centre and SkyCity hotel, and the Justice Precinct project in Christchurch.
Angry shareholders at the company's annual general meeting today described the business as a 'disaster company' after the news, and Fletcher's shares dropped 5.3 percent after the announcement was made this morning.
But others said they were pleased with the way the board had responded to the company's situation by taking an immediate pay cut.
About 40 protesters, some of them workers demanding better pay, greeted shareholders arriving at the meeting at the Auckland Museum.
More than 200 shareholders were at the meeting, with an additional 200 guests.
Chair Sir Ralph Norris said considerable remedial action had taken place in the past year, including the sacking of the chief executive and changes to the management of construction division.
However, he said the measures would only go so far in altering the trajectory of Fletcher's legacy projects which commenced some time ago.
Sir Ralph said the company would separate the ongoing losses from the building and interiors division from its full year profit guidance in order to provide investors with greater transparency.
"We are aware that further downside risk and uncertainty exists in Building + Interiors, and are cognisant of wanting to provide the market with as much transparency around these risks as possible," he said.
Sir Ralph told the annual meeting the board accepted responsibility for the losses.
"Construction is a dynamic and sometimes volatile business. Some of our projects are complex and will take a number of years to complete. During that time, as the projects develop, risks can materialise and negatively impact our financial position."
New CEO announced
Fletcher Building has also announced its new chief executive, with Ross Taylor replacing Mark Adamson.
Mr Taylor has recently been chief executive of engineering and manufacturing company UGL.
He will start in the role next month.