Gold at end of Contact rainbow

By GEOFF SENESCALL

Contact Energy chief Paul Anthony is tipped to have had a bumper year, hauling in a pay packet of $3.7 million.

Of that, $2.5 million relates to a buyout of his contract, which provided him with a golden parachute at the time the former state-owned enterprise changed hands.

At his discretion, he could get the new owners to buy out his contract. This deal was negotiated when Mr Anthony was headhunted from England to build the company into a viable business which could possibly be sold sometime down the track.

But Contact's new major shareholder US-based Edison Mission Energy wanted to keep Mr Anthony.

It had just paid $1.2 billion for a 40 per cent cornerstone shareholding in Contact from the Government, which was much higher than anyone else was willing to pay. Among other things it was keen to retain the expertise of Mr Anthony, who was understood, at the time, to have been courted by a number of energy companies overseas.

So the company bought him out of his old contract and negotiated a new one with him. His new package is understood to be incentive-based. Mr Anthony's base salary is thought to be around $450,000 with eligibility of a performance bonus of up to 50 per cent of that amount.

On top of this, Mr Anthony is believed to be getting a payment on May 25 next year of an amount equivalent to the price of 330,000 shares.

At yesterday's close of 341c (up 5c) that equates to $1.125 million, which, with his base salary and bonus, pits him alongside other top executives in this country.

With Edison Mission expected to lift its holding to above 50 per cent, the value of Mr Anthony's share-based payment could easily go much higher.

Because Edison Mission is deemed to be an insider it cannot buy shares in the lead-up to the release of Contact's profit result. It must also give 15 working days' notice before it can buy shares.

Contact, New Zealand's largest combined electricity retailer and generator, releases its result today for the year ended September. While analysts are expecting a net profit of around $120 million, there is some suggestion that the profit will more likely exceed $150 million including one-off gains - nearly double its previous annual profit of $80.3 million.

The higher profit is also expected to lead to a bigger dividend payout to shareholders.