Shareholders seek Contact pay clarity

David Baldwin. Photo / Simon Baker

A shareholders' group wants clarification from Contact Energy's board over how the company's managing director's remuneration is reported and is concerned about the independence of some directors.

Contact holds its annual meeting today and the Shareholder's Association says pay figures for David Baldwin are confusing.

The company is 51 per cent owned by Australia's Origin Energy from which Baldwin was seconded to Contact in 2006.

In the Origin accounts the base pay is shown as A$678,577 ($893,285 ) plus a variable amount of A$396,376 ($521,797) and options of A$554,238.

The association's corporate liaison director Des Hunt said Contact accounts show the base pay at $838,856 and a variable of $354,000, but no mention of the options which are part of the long term incentive.

The Contact accounts show 253,609 options were issued during the 2010 year.

"So neither the variable amounts or the options marry with the Origin report," he said.

The Contact accounts note Baldwin's base salary was adjusted for holiday pay rates and all his fixed remuneration and all or part of his short term variable remuneration is reimbursed by Contact Energy.

Hunt said the association was looking for consistency of reporting.

It was also concerned about the independence of the board, with board member Phil Pryke deemed independent despite being closely associated with Origin's plans in the past.

"With Origin they've made it very clear that with 51 per cent they can do what they like. When it comes to voting independent directors they should not be able to use their vote," Hunt said

Pryke is up for re-election at today's meeting in Christchurch.

Yesterday, Contact released monthly operating data which showed the number of electricity customers fell from 479,000 to 470,500 in the year to the end of September. The number of gas customers has also slipped - from 63,500 to 63,000. LPG customers are steady on 58,500.

Contact made a net profit of $154.7 million for the year to June 30, up from $115.6 million last year when the company was badly hit by high gas prices, transmission constraints and low prices for power. Total operating revenue fell from $2.22 billion to $2.16 billion.