A 73 per cent pay rise for Mighty River Power directors is "realistic" and it is "sensible" to do it now before the company is listed on the sharemarket next month, Prime Minister John Key says.
State Owned Enterprises Minister Tony Ryall yesterday said the company's directors' base pay would rise from $49,000 each per annum to $85,000, while chairwoman Joan Withers' pay would go from $98,000 to $150,000. There will also be a general pool of $85,000 for committee work to be distributed by the board, Mr Ryall said.
The announcement comes just before Mighty River's prospectus is released today. Mr Key said with Mighty River set to become a publicly listed company "it's important that they attract the right people".
"It's also realistic to get that dealt with now because their fee structure is out of whack with what we see in terms of private and listed and publicly listed companies, so yeah I think it's sensible to make that step now."
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The new level of fees was also "consistent with what we see in other mixed-ownership type companies like Air NZ". Mr Ryall said the increase was about compensating Mighty River's nine directors for "the extra workload and responsibility in a listed environment".
Green Party co-leader Russel Norman criticised the increase as an additional cost "which will have to be paid for through higher power prices for Kiwi families and businesses".
"So much for the promise that privatisation would deliver cost-efficiencies and savings," he said.
"Mighty River isn't even on the market yet and privatisation is already pushing up its costs."