Mighty River bosses get extra $220k for sell-off

Photo / APN

Directors at the first energy company to be partially sold off have picked up an extra $220,000 in fees for working on the deal.

Mighty River Power's nine board members were paid the money for about an average of 20 extra days' work preparing the company for sale, according to papers released under the Official Information Act.

State-Owned Enterprises Minister Tony Ryall, who approved the payment, expressed concern over how much it has cost but would not rule out further payments.

And he has also said director fees could rise from $1200 a day after the sale because the job would be harder and carry greater risk.

The partial sale of Mighty River Power moved a step closer yesterday when Parliament passed legislation to sell up to 49 per cent of four state-owned energy companies.

With the law passed, the company will now begin a marketing campaign moving towards the first offering of shares to the public.

It came as a Treasury document revealed directors at the company expected their daily fees to increase and wanted the Government to do it so they didn't have to at the first shareholders' meeting.

Boards at the four companies - Mighty River Power, Genesis, Solid Energy and Meridian - got $120,000 to start work on the sale from last July.

When Mighty River Power was chosen to be sold first, board chairwoman Joan Withers started to lobby Mr Ryall for funding to get the company ready for the share offering.

Ms Withers, who is also chairwoman of Auckland International Airport and on the TVNZ board, said the nine directors would need to do up to 190 days' work - about 21 days' work each at $1200 a day to a maximum of $228,000.

Her request was followed by an approach to Treasury from a company executive, who asked that the board get $250,000.

Treasury officials noted the amount requested had "crept up" and recommended Mr Ryall offer less.

He did, approving $190,000 for work to be done from January to the end of this week.

On the briefing paper, he wrote: "This is a lot of money and should be made clear this is a cap for extra mixed ownership model work and there should be strong record keeping to ensure that shareholders' money is well spent."

Mr Ryall said he was considering approving another increased payment to directors from next week to reflect increased work as the share float got closer.

He also said the $1200-a-day rate was also under review because of the "additional risk and responsibility of publicly listed companies".