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.
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.
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