KEY POINTS:
Contact Energy's plan to nearly double the pool of directors' fees from $770,000 to $1.5 million has aroused anger.
Shareholders Association chairman Bruce Sheppard said the move was "obscene" and predicted fireworks at the company's annualmeeting in Auckland on October 23.
Contact is 51 per cent owned by
Origin Energy and the plan outlined in the notice of its meeting is almost certain to pass.
The size and complexity of the company and international benchmarks have been cited as justification for the 95 per cent hike, the first since 2004.
The top paid non-executive director is already on a package equivalent to $1000 a day.
Sheppard said the six directors, three from Origin and three independents, did not deserve any increase.
"It's not a difficult company. It owns a few power stations and it sells its power either by way of contractual arrangements or on the spot market, collects money and pays a dividend to shareholders."
Contact is now vying with Telecom to be New Zealand's biggest company by market capitalisation. Last month it blamed low rainfall in the South Island for a June year net profit of $237 million, down 1 per cent on a year ago.
Sheppard said flat profits proved they were not doing a stellar job. "There is beginning to be a pattern of directors seeking more reward against the backdrop of a global international meltdown, falling performance and pretty pedestrian track record."
Paul Glass of Brook Asset Management said he generally did not have a problem with fees increasing but there was an issue with the quality of directors. "I think there's a general need in New Zealand for directors' fees to increase, we would like to see the overall quality of the directors pool increased."
Acrimony from some among 20,000 small shareholders and the Contact board spilled into the annual meeting two years ago over the failed $8 billion merger with Origin championed by independent director Phil Pryke.
And last year just on 70 per cent of non-Origin shareholders unsuccessfully voted against the re-election of Tim Saunders, the former director of failed carpet maker Feltex.
Pryke who is the company's deputy chairman, received $365,000 last year including $50,000 in shares.
Institute of Directors chief executive Nicki Crauford said Contact's size meant the increase was appropriate.
"It's a big hike but then they haven't put it up for four years. I guess they would be advised to put it up less more regularly."
Contact fell 10c yesterday to $8.50.
