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More pay for them; bigger bills for us

Written By: - Date published: 1:09 pm, April 4th, 2013 - 24 comments
Categories: accountability, capitalism, class war, national/act government, Privatisation, russel norman - Tags: , ,

Sales of our power companies, as many already knew, will mean bigger power prices for Kiwis, and higher paid for the top brass in the power companies.  This has been confirmed by today’s announcement by the government, that Might River Power top brass will be receiving massive pay rises.  This so they can feel like they belong in the same big earning circles as the corporate elite.

Hamish Rutherford reports:

The Government announced that the annual fees for directors would increase by 73 per cent to $85,000 a year.

Chairwoman Joan Withers will see her fees increase by more than 50 per cent, to $150,000 a year.

Ryall said the move was to ”adjust the level of fees MRP directors are paid to bring them more into line with comparable listed companies”.

”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,” Ryall said.

Ryall’s statement did not make it clear when the changes would take effect, but he was adamant the changes were not in excess of similar private companies.

Russel Norman is quickly on the case:

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.

“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.

These are the directors that look to be the ones to benefit from this pay rise: many already have more than one executive position on the go.

Joan Withers, MRP Board Chair: is one of the ex-Feltex directors that are subject to a class action suit by shareholders:

Shareholders are alleging Fair Trading Act and Securities Act breaches, negligence, dishonesty and deception, although claims of breaches of fiduciary duty have been struck out in earlier appeals.

Deputy Chair Trevor Janes, is also (as on the Might River website),

Deputy Chair of the Accident Compensation Corporation and a director of ProCare Health. Trevor is also a member of the Ministry of Foreign Affairs and Trade International Development Advisory and Selection Panel, a member of the NZ Post Network Access Committee and an issuers’ representative on the New Zealand Markets Disciplinary Tribunal. He was a director of finance company Capital + Merchant Finance Limited from 30 March 2005 to 31 October 2006. That company was placed into receivership on 23 November 2007.

According to James Weir, we have not been told why Janes is unlikely to face charges over the Capital and Merchant failure.

Former Capital + Merchant director Trevor Janes is not facing criminal charges and civil proceedings launched by the Securities Commission against his fellow Capital + Merchant directors last week.

Commission general counsel Liam Mason would not say why Mr Janes is not facing charges, nor if Mr Janes had spoken to the commission.

Mr Janes was one of the directors who signed Capital + Merchant’s prospectus on August 15, 2006.

Two other directors who signed the prospectus, Neal Nicholls and former director Wayne Douglas, face Securities Commission allegations of making untrue statements in the prospectus.

Capital + Merchant Finance collapsed into receivership on November 23, 2007, owing about 7000 investors around $167 million.

The receivers say it is not likely any of the money invested would be recovered. Capital + Merchant invested mainly in smaller scale property development.

Mr Janes resigned from Capital + Merchant about 15 months before it went into receivership and business sources said he was a “straight up and down guy” who was well respected at the highest levels in banking.

Mr Janes is an investment banker and financial analyst as well as an experienced director on a number of large company boards, including state-owned Mighty River Power. He is deputy chairman of Abano, and chairman of investment company Salvus. Mr Janes is also a Public Trust director.

An NBR article reports that, at parliament’s transport and industrial relations committee, Phil Twyford had queried Jane’s suitability for the ACC job.  Paula Rebstock responded supporting Jane’s appointment.

Director James Miller (back to the bios on the Mighty River Power website):

He is a director of NZX, New Zealand Clearing and Depository Corporation (a subsidiary of NZX), the Accident Compensation Corporation and Auckland International Airport and is a member of the Financial Markets Authority.

The rest of the directors and their other roles can be seen at the above link. These are the kind of people that will benefit from the sale of our power companies, while we will be paying more for our electricity.

24 comments on “More pay for them; bigger bills for us”

  1. emergency mike 1

    Jebus it’s like a Dilbert Cartoon.

    Govt: We’ve decided to nearly double your fees because you are doing such a great job. Tell me, what ideas do you have to increase profits?

    Directors: According to our calculations if we raise power prices, we will get more money, and that means more profit.

    Govt: Your pay rise is money well spent.

  2. mac1 2

    Of course the directors need these “conservative” increases. They will have a difficult job to do increasing the price of power to the consumers who will have to pay for enlarging power generation capacity in order to sell more power to the consumers who will then have to pay for increased fees to the directors………………

    Meanwhile I will say this again- the original director’s fee is what I earn now as a cleaner- for two years work. The 73% increase will make that about three and a half years salary.

  3. Draco T Bastard 3

    These people just aren’t connected to reality and they’re certainly not doing the public any service.

  4. Dv 4

    Look over therE!!

  5. ianmac 5

    Spose if the increase is done now it might look better than when/if Mighty River is sold.

    It reminds me of a crowd waiting for the procession to start. Some shuffle forward. So others shuffle forward because the first lot are in front. So the first lot shuffle forward because the second lot are in front. So the second lot shuffle forward because….ad nauseum. So it seems to be with Directors salaries. A sort of “They do it so we are justified in doing it too to keep up.”
    Ultimately it will justify millions being paid just because….

  6. fender 6

    Shouldn’t they only be getting 49% of that pay rise considering 51% is to remain Govt. owned?

    I wouldn’t give them any extra personally.

  7. (Not the real) Rodney Hide 7

    Russell Norman needs to learn to STFU! Stop pointing out glaring examples of unfairness in our political-economic system. Does he not realise how bad this makes us look?!
    If he just kept mum about these trifling matters then he himself could probably benefit from them, what a mug!

  8. Dogberry 8

    This plus the Tiwai Point ferrago is making me seriously consider diverting the $20-30,000 I’d put aside for power company purchases into a whole-house solar system instead – an outlay of $25,000 would see me home-and-hosed power-wise and even taking my power-bills for the last 12 months rather than the next would give me a return of over 10%.

    Plus no more outages and I wouldn’t be paying a cent towards the upkeep of these over-egoed yes-men.

    Plus $25,000 less in the bank for the banksters to use to underwrite their gambling and bonuses.

    What’s not to like?

    • geoff 8.1

      What’s hard to evaluate with these sorts of calculation is the intangibles like: how good would it feel to not have the power companies milking you? How good would it feel to turn the page in the paper and read about across-the-board power price increases and know that you are untouchable?
      I’m guessing it would feel pretty good.
      The only thing that would concern is the cost of maintenance for a system like that. One thing in your favour would be the ever decreasing prices for solar cells. But then you start thinking, well maybe I should just wait 5 years and I’ll only have to pay $15,000 for the system so you end up putting it off.

      • tc 8.1.1

        solar only works as a 24 X 7 system with battery banks supplying the stored energy at night or another form of generation i.e. gas/diesel so hardly clean.

        maintenance, battery storage etc, they know it’s not easy to do or a small capital investment that’s why they behave as they do……and the fact they’re run by sociopath’s.

        • geoff 8.1.1.1

          I wouldn’t bother with batteries, I’d have a grid tie system and get paid to generate. I believe genesis still pays people the same price for the electricity they generate as the power they use. Then you just need enough solar capacity to offset what your annual use is.

          • geoff 8.1.1.1.1

            Not Genesis, maybe Meridian. Although looks like they have or are in the process of changing their feed in rates.
            Hmm maybe not so independent. I hate the idea of batteries though.

            • DH 8.1.1.1.1.1

              Meridian. Their new feed-in tariff came into effect this month, I was informed the daily rate is 1:1 for the first 5 kw/hr and 10c for any extra feed-in after that. Grid-tie systems only feed back to the grid what’s not being used so you’d get more than 5 Kw/hr’s worth but it’s not enough to cover evening & morning use in the average home.

    • tc 8.2

      One could suggest it’s exactly what Shonkey wants, scare the local horses so his banksta mates hover even more up.

      Dogberry you should be doing that anyway and unless you’re off grid you will always be paying them something in terms of monthly connection/line charges…..the game’s way rigged in their favour, try putting power back into the grid and see how tough and ridiculous that farce is.

      • geoff 8.2.1

        the game’s way rigged in their favour, try putting power back into the grid and see how tough and ridiculous that farce is.

        Have you had some experience with this? It does sound like something they would do to protect their oligarchy.

        • Dogberry 8.2.1.1

          Yeah. Without solid statutory backing to feed-in rates I wouldn’t consider staying on-grid.

          Best to go completely independent.

      • SpaceMonkey 8.2.2

        The banksters aren’t coming in for the shares until “Ma and Pa” have been scared by the loss in the value of their shares. The banksters have oversight of the whole process… they know where the skeletons are and will more than likely move them into darker spaces, off the books, or talk them down so the power generators look better and public confidence is maintained. A nice price will be set to fleece “Ma and Pa” afterwhich the skeletons will be “discovered”… price sinks, Ma and Pa panic and sell… bankster buys. Alongside this, the bankster has a short on the share price of the power generator.

        So throughout the whole scam… the bankster gets a fee for selling it (if they are one of the institutions overseeing the sale), has a side-bet on the devaluation of the share price which it uses to vacuum up any going shares when the ordinary investors sell in a panic. Standard pump and dump, though after Facebook I expect it to be more under the radar

  9. KiwiOverseas 9

    John Key can try to be the best con man since Roger Douglas, but the mess he creates won’t be worse than the mess Labour had to clean up from the 80s and 90s. National knows it’s time is up so they are selling assets, filling pockets and fleecing the middle class and the poor.

  10. Ennui 10

    Kleptocracy, nothing illegal of course but morally outrageous. We always suspected the emperors clothes hid a festering sore, now naked for all to see. There are’nt even any apologies or hiding from the overt carpetbagging of their buddies lining up for a slice of the action at our expense.

  11. xtasy 11

    Karol: Where do you get all this highly interesting info from? I am very impressed, you are making a huge contribution to the Standard.

    Yes, here we have the few at the top again filling their pockets, while consumers will face electricity price increases. It seems to never stop, every few months I get letters from MRP to entice me into signing up for a fixed rate for 2 or 3 years.

    But hey, how can one rely on that, and as a renter, I may well have to move all over a sudden, and being on a benefit will not make it easy for me to keep the account.

    Then I would be hit with a payment to opt out.

    I am starting to agree with Penny Bright, that all Mercury customers should simply switch providers, so there will be few consumers and customers left for them. That will send a message home to the prospective share buyers.

    God, if only enough Kiwis would bloody wake up and use their common sense and not fall for the tricks and dirty deals by Key and his government.

  12. johnm 12

    How to help the plebs to ‘strive': TAKE MONEY OFF THEM…* How to to help the rich to strive: GIVE THEM MORE MORE MONEY! ** Twisted logic from the Tory filth. :-( :-( :-(

    * By selling their assets and increasing their power costs.

    ** Give them massive pay rises and tax cuts. :-( :-( :-(

    U$K Take money off the bennies give corporations at the same time a tax cut!

    NeoLiberal Terminal madness.

    • johnm 12.1

      Also help your rich class by demonising the underclass* while you bail out your corrupt money grubbing mates:

      **Benefit fraud £1bn a year
      tax fraud, evasion and avoidance £120bn
      bank bailouts £1tn
      QE all for banks £375bn in 4 years
      Tories supporting their rich friends, always

      * It seems incredible that we have a UK government that is willing to use a vile character like Philpott as a political tool to further demonize the poor, disabled and underpaid in this country. Never has there been a government more determined to divide and isolate the people of this country. These people have successfully managed, along with other far right governments around the world, to destroy all the progress made by the working classes over the past 100 years. These people care nothing for you or your family, be very aware of this. They may reduce the above to a total state of poverty and then where will they turn their greedy eyes to? So before you ‘I’m alright Jack’ people get too smug in your world of haves be prepared to join the have-nots. Remember 100,000 plus civil servants were haves only a short while ago.

  13. TEA 13

    A great divi earner for all share holders.

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