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Contact Energy's board has backed down on any base fee rise for directors after enduring a roasting by hundreds of small shareholders, heat from within the business community and political pressure.
After an unscheduled board meeting yesterday afternoon, Contact announced it would hold fees at current levels - ranging from $67,000 to $100,000 - just hours after defending the need to nearly double the fee pool at the company's annual meeting.
With the backing of its Australian parent Origin Energy, Contact's directors' fee pool can rise to $1.5 million but there will be a lid on individual rises.
"After due consideration for the current economic environment, the board considered the base level of fees to be paid to directors and has determined that there will be no increase in base fees at this time," company chairman Grant King said.
Anger at the rise had mounted in the lead-up to yesterday's meeting which came as the company pushes up power prices. But Contact had shown no signs of changing tack.
At the sometimes heated two-and-a-half-hour meeting, King had several times turned down the opportunity to compromise on the fee pool but had stuck to the line it was necessary for the future expansion of the board. Details of any changes to the fee structure for Contact's three committees had not been worked through.
Shareholders Association chairman Bruce Sheppard said Contact's decision was a "great result".
"But it beats me why they would want to self-flagellate themselves at the meeting."
During the meeting he had pressured the board to change the order of the agenda, use a show of hands for voting and at one stage asked three board members individually whether they were underpaid.
Speaking to reporters just after the meeting, King said he would "not beat about the bush" on how the vote would fall,
"There is one vote per share, our company has paid billions of dollars to have 51.4 per cent of the shares and I think it's quite disingenuous to say Origin would act in a way that's not in the interests of Contact."
During the meeting King said the fee rise could be 25 per cent this year and this was the first increase in four years.
Condemnation of the move was at times angry. Directors were told they had their "snouts in the trough" and they "should be ashamed of themselves" by speakers and members of the crowd.
He said the enlarged pool would put it on a par with "comparable" companies Fletcher Building and Telecom.
It would not immediately rise to $1.5 million but this would give the company scope to add new skills to an expanded board if it saw fit.
This did not wash with one shareholder, civil rights lawyer Barry Wilson, who amplified the view of some commentators that the complexity of the business bore no relation to the other big companies.
"You get the power in and you distribute it - these assets weren't built up by the directors of Contact, they were built up by the taxpayer."
He said it was time for directors of a high calibre and some should "get their snouts out of the trough".
Sheppard donned his Viking headgear for the first time in four years to signify his anger at the fee rise.
He said the Contact board had reached a "moment of truth" and it was at risk of aggravating not only shareholders but the New Zealand public.
Contact said yesterday that it had paid human resources consultants Mercer $20,000 to assess appropriate pay levels for the board.
Sheppard said Mercer had erred in putting Contact in the same category as an Australian company, taking a swipe at Contact's deputy chairman Phil Pryke.
"Phil if you want to derive Australian director's fees migrate - we'd all be eternally happy."
Pryke was up for re-election with fellow independent director John Milne and said he would not respond to attacks.
In the past year he received nearly $365,000 in cash and shares for his board work and his roles chairing the remuneration committee, and as a member of the health, safety and environment committees.
Shareholders were told a large portion of this was for committee work done during a merger proposal two years earlier.
"In my time at Contact the media and some commentators have taken potshots at me from time to time and today's a good example. I will not rise to the personal attacks. All I think about is Contact - that's all I think about."
This prompted a cry of "and the money" from a heckler.
Pryke said he was not prepared to take the safe road that would lead to a mediocre future.
"I've been prepared to test, question and push the boundaries - inevitably there will be those who criticise."
He said he was prepared to take a stand as the role of an independent is to stand up for all shareholders, rather than any particular group of shareholders
"To do so would be illegal - I don't break the law."
Contact was navigating its way through profound changes including carbon charges, and capital spending of over $3 billion, said Pryke who has been with Contact for 14 years.
"You think that's easy - I'd really like to figure out how anybody thinks it's easy, I really would."
Contact shares closed down 29c to $7.02.
