The directors of Mighty River Power, which is poised for a partial privatisation, are set for major pay rises to bring their fees "more into line with comparable listed companies," State Owned Enterprises Minister Tony Ryall says.
When up to 49% of Mighty River Power's shares are sold through an initial public offering, annual director fees will increase by NZ$36,000, or 73%, to NZ$85,000 from NZ$49,000. Joan Withers, who chairs the company, will get a NZ$52,000, or 53%, rise to NZ$150,000 from NZ$98,000. Ryall also says there will be a general pool of NZ$85,000 for committee work to be distributed by the board.
“Fees need to be at a level that will attract and retain directors who have the required governance skills to operate effectively in a listed company environment,” says Ryall.
“We are advised that the current fees for Mighty River Power directors are well below those paid by comparable listed companies. We understand directors of similar sized companies listed on the NZX currently receive at least twice the current Mighty River Power fees, if not more."
“Contact Energy pays its directors NZ$115,000, Air New Zealand pays NZ$82,000, Telecom NZ$130,000 and Trustpower, which is a much smaller company than Mighty River Power, pays its directors NZ$75,000 per year."
Ryall says a "reasonable but conservative" increase has been made to Mighty River Power directors' fees to compensate them for the increased responsibility in their new roles, and the added risks around being on the board of a publicly listed company. His statement doesn't elaborate on what the increased responsibility or added risks are.
Mighty River Power's other directors are deputy chairperson Trevor Janes, Michael Allen, Prue Flacks, James Miller, Tania Simpson, and Keith Smith.
11 Comments
Agreed Wolly. I struggle with the logic here:
“Fees need to be at a level that will attract and retain directors who have the required governance skills to operate effectively in a listed company environment,” says Ryall.
MRP's low fees have clearly not attracted or retained directors with the required governance skills. So the current directors are to be replaced?
Or does increasing their fees raise the current directors governance skills?
I don't think you have it both ways, but then we may be confusing State Owned Enterprises Minister Tony Ryall, and logic.
“We are advised that the current fees for Mighty River Power directors are well below those paid by comparable listed companies. We understand directors of similar sized companies listed on the NZX currently receive at least twice the current Mighty River Power fees, if not more."
Did anyone consider that directors at comparable listed companies are overpaid?
Russel Norman's not impressed:
The cost of National’s asset sales has risen again with Mighty River
Power’s board receiving extravagant pay rises, and it’s Kiwi households
and businesses who will pay through higher power prices, Green Party
Co-leader Dr Russel Norman said today.
The National Government has announced that it is giving Mighty River board
members a 73 percent pay rise to $85,000 a year and a 53 percent raise for
the Chair to $150,000 a year. A further $85,000 will be allocated for
additional fees to directors for committee work. National’s justification
for these increases is to match private directors’ rates ahead of the sale
of Mighty River.
“National’s asset sales mean higher pay packets for electricity company
directors, which will have to be paid for through higher power prices for
Kiwi families and businesses,” said Dr Norman.
“So much for the promise that privatisation would deliver cost-efficiencies
and savings. Mighty River isn’t even on the market yet and privatisation is
already pushing up its costs.
“This is emblematic of the high cost/high profit model of privatised
electricity companies, which sees private power companies charge consumers 11
percent more on average than publicly-owned ones.
“These latest costs come on top of the hundreds of millions dollars of
taxpayer money that National is wasting on its asset sales agenda.
“The claim that extravagant pay packets for directors are necessary to get
better performance out of Mighty River is rubbish. As an SOE, Mighty River
won the Overall Energy Company of the Year and the Innovation in Electricity
Award at the most recent Deloitte Energy Excellence Awards, beating out
private sector competition with more expensive directors.
“Asset sales equal higher costs and higher power prices. Contact confirmed
as much this week when it called for higher power prices so it could pay
larger dividends to its private owners.
“New Zealanders don’t want asset sales and we can’t afford them.
National should put its asset sales agenda on hold until the referendum is
held and listen to the will of the public,” said Dr Norman.
Kimy - trite nonsense.
The underlying issue is energy, without which nothing else happens. Hydro is just secondary solar - think a little bigger, hey?
Asset sales are just one section of the community being selfish enough to wish to benefit from another section of the community, in a zero-sum game.
Life's a bit too short to be bothered with such nonsense.
No, not technology, energy to free, energy. The more technology we deploy the more energy it uses. So you need to look at the TCO, total cost of ownership in terms of energy of thewhole system. Its a simple thought many dont grasp, money is an IOU or proxy for energy, hence why so many get confused or draw wrong conclusions.
Obviously unlike yours, PDK's and my mind is constrained from la la make believe by maths, physics, science and engineering and sorry old chap laws of the universe win.
The green party I just left, they have descended into pork barrel politics...declining to even consider things like population control and any other nasty realities that will in the next decade be forced on us.
Subsidized solar panels can only be afforded by those with most of the capital (or those with all of it spend less of it). The poor wont be buying such a setup, so what you propose is a regressive tax. ie a tax that hammers the poorest the heaviest.
regards
Mist,
pretty much agree
IF the Fees went up
AND
All the current directors and chair were replaced by people who were generally accepted as being a fine set of directors
THEN
I would agree with the increase in Fees
OTHERWISE
If all the current directors remain THEN
IMO, It is just a convenient way for the current directors to gorge at the companies expense
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