Power firm chiefs' pockets heavier

16:00, Oct 08 2010
Tim Lusk
TOP BLOKE: Meridian Energy chief executive Tim Lusk has apparently enjoyed a healthy year moneywise.

Chief executives of state-owned power companies all got a boost to their pay packets this year, despite the fortunes of their companies.

With packages sometimes over $1 million, recruitment specialist Lilias Bell said the salaries were "good pay" in difficult industries.

"Salaries in the energy sector and in SOEs are always an issue because you're competing against the private sector and internationally," said Ms Bell, a partner with Heidrick & Struggles.

She warned it was important to remember some packages included long-term incentives to keep key staff in place.

One of the top earners was Mighty River Power's chief executive Doug Heffernan, who made a total of $1.3m, up only slightly from $1.25m last year.

That was during a year when the company's net profit fell to $84.5m from $159.6m during an exceptionally good 2009 year.


Mr Heffernan's biggest increase was a $53,000 rise in long-term incentives.

His short-term incentives were virtually unchanged and fixed pay lifted from just over $10,000 to $934,000.

Mighty River failed four of its performance targets but was the best performer of the four power giants for return on capital, returning 9.7 per cent.

At the biggest state-owned company, Meridian Energy, one employee – presumably chief executive Tim Lusk – earned a total of between $850,000 and $859,000. It is assumed he was the second-highest earner last year on $750,000-$759,000.

The highest earner in 2009 was an exiting staff member who took home $1.03m including severance payments.

Mr Lusk's increase followed a 106 per cent increase in Meridian's net profit this year of $184m.

Meanwhile, Genesis Energy, which enjoyed a turnaround in its annual result, appears to have paid chief executive Albert Brantley a salary of between $970,000 and $980,000.

Last year the company's top earner made around $1.61m but that is assumed to be previous chief executive Murray Jackson's salary and other benefits.

Genesis turned in a net profit of $69m after tax, after a $136m loss in 2009 following writedowns on its Huntly plant.

At the publicly listed and privately owned Contact Energy, managing director David Baldwin earned a take-home pay of $1.2m, up slightly from $1.1m the year before, but the total package was closer to $1.34m.

Contact's underlying earnings after tax fell 6 per cent to $150m, down 6 per cent.

The company has been forthcoming about Mr Baldwin's package, saying the fixed portion of his salary remained unchanged at $838,856, but his cash bonus increased by almost $80,000, while the value of his options and shares reduced slightly.

Among the other state-owned enterprises, powerlines company Transpower paid chief executive Patrick Strange $940,000-$949,000.

Its top earner was unspecified, earning $970,000-$979,000 including severance.

Transpower's net profit rose to $142m, from $136m the year before.

At Solid Energy, chief executive Don Elder saw his base salary fall this year although his performance pay rose in a difficult year for the company.

His total renumeration rose to $1.4m ($1.27m last year), even though the company's net profit toppled from $110.8m last year to $67.8m.

NZ Post's top earner made between $950,000 and $959,999, but it was not group chief executive Brian Roche who started in January.

His predecessor, John Allen, left last June.

A series of one-off items slashed NZ Post's net profit of $1.3m compared to $71.8m the year before.

Staff earning over $100k:

Contact: 200 (262 in 2009)

Meridian: 262 (241)

Genesis: 195 (200)

Mighty River: 217

Transpower 339