RJR’s directors hold little shares in the media group to avoid conflict, according to Lester Spaulding. However, the chairman of the company, which owns TVJ, said the reintroduction of stock option plan is being considered by the board.

“I believe in some instances that shareholding creates a conflict of interest and I feel that it’s not a good thing to have people who are trading your shares [to be on the board],” said Spaulding in response to a minority shareholder query during the discussion segment at the annual general meeting (AGM) held at the Jamaica Pegasus Hotel in Kingston last week.

“I do not feel that I must say to a director, ‘you must buy shares to show me you are loyal’,” he added.

Currently, just four of the nine directors of RJR held any shares at all. Of them, the chairman had the highest shareholdings — 7.8 million stock units, representing a 2.1 per cent stake in the media house.

He is followed by Carl Domville who owns 317,600 units; Gary Allen (managing director), with 5,000 units; and Glenworth Francis, 3,000 units. Spaulding’s comments were met with murmurs from some small shareholders in the audience of roughly 150.

“I don’t understand how you arrive at how it’s a conflict of interest,” said one shareholder in the discussion segment to the company’s chairman. Spaudling contextualised that RJR historically encouraged shareholder participation to staff and directors. “A lot of employees have shares at concessional terms,” he said.

“We are in the process now to get a share option scheme which allows the directors to get shares that would not necessarily be at market (price).

Their reasons for not buying on the open market is a private one.” RJR group made a profit of $15.2 million during the three months to June 30, or $2 million more than yearearlier levels. The group invested some $300 million in upgrading its network during its last financial year.

The investment included the construction of a new tower in Flower Hill, St James; expansion and reconditioning of a transmitter in Mount Airy, Westmoreland; and expansion of transmission facility at Huntley in Manchester.

RJR also plans to launch Internet subscriber TV to bolster its investment upgrade. It will use overthe- top (OTT) technology to deliver content rather than a dedicated, managed IPTV network.

RJR returned to profitability in its financial year ending March 2014 with net earnings totalling $59.4 million. It was aided by its TV services with radio posing the “biggest challenge”, said management.

The group describes the industry as suffering from an overall decline in advertising spend by companies due to the austere economy. Specifically, RJR recorded its first revenue rise in three years at $1.84 billion for its year ending March 2014 compared with $1.78 billion.