Imagine having a maximum wage. No not minimum, maximum Troy Resources (ASX:TRY) does, with a limit of $800,000 for the board collectively, but shareholders want that cut by 75 per cent.

A board letter to shareholders on one hand said directors aren’t actually getting paid $800,000. On the other, it said they should not have their right to do so taken away.

Shareholders unanimously set the ceiling back in 2011. But since late 2011 shares have lost 98 per cent, falling from $4.68 to 8.7 cents.

One fed up substantial shareholder, RAMcap, is calling for a meeting to cut the ceiling to $200,000. It also wants to remove director John Jones.

With a total wages bill of $288,314 in 12 months this would be a hefty pay cut, albeit less than if it was $800,000.

Don’t cut our pay!

The board argued they deserved every cent. It also argued a wage ceiling would make the company unable to attract talent.

“During the year ended 30 June 2018, 15 board meetings, three audit committee meetings and two nomination and remuneration committee meetings were held,” it said. “The large number of meetings [are] reflecting the perilous financial and operational circumstances of the company confronting the board at the time.

“These perilous financial and operational circumstances were arguably the catalyst for the immediate prior resignation of each of the chairman, managing director, a non-executive director, two chief financial officers and the company secretary in quick succession.”

The board said that “common sense” would suggest if Troy (or any other company for that matter) did not pay fees commensurate with the requirements of the task, then attracting and retaining personnel with the requisite skills and experience would be problematic.

Troy demanded RAMcap withdraw its “request for this frivolous meeting of shareholders”.

It said if it didn’t, Troy would end up spending “scarce shareholders’ funds on an administrative matter of no consequence.”

“Your directors consider funds would be better spent on exploration activities,” Troy said.