Contact defends $1.2m pay package for chief executive

David Baldwin, managing director of Contact Energy. Photo / Greg Bowker

Contact Energy is citing factors including an improvement in the company's health and safety record as a reason for a big boost in the pay of chief executive David Baldwin.

Baldwin's fixed cash remuneration has stayed at $838,856 for the 2010 financial year but his cash bonus rose from $246,000 last year to $364,000 in the 2010 financial year. His total cash remuneration has risen from $1,084,856 to $1,202,856.

The company says in its annual report that a further two-thirds of Baldwin's total potential remuneration made up mainly of options and restricted shares remains at risk.

Short-term incentive remuneration is determined based on achievement of performance goals and criteria set by the board.

"This includes financial performance, health and safety performance and strategic goals being met. David Baldwin's remuneration [reflects] this. You will note for example that HSE performance has improved by 25 per cent this year," a spokeswoman said.

Contact made a net profit of $154.7 million for the year to June 30, up from $115.6 million last year when the company was badly hit by high gas prices, transmission constraints and low prices for power. Total operating revenue fell from $2.22 billion to $2.16 billion.

The annual report shows directors' fees, the source of shareholder outrage and a consumer backlash in 2008, have increased.

Although the fee pool remained constant at $1.5 million, the total distributed rose from $852,651 in 2009 to $993,285 this year.

Chairman Grant King's fees remain constant at $200,000 but deputy chairman Phil Pryke fees drop from $150,000 a year to $125,000 per annum.