No fee increase for Contact directors

Contact chairman Phil Pryke says the board has withdrawn a resolution seeking shareholder support for an increase in directors' remuneration.

The move follows last year's failed attempt by the company's directors to double their fees. This year both the chairman and directors were asking for around a 40% lift in payments.

Contact chairman Phil Pryke says the Board's decision to withdraw the resolution is in the best interests of the company.

"But I should make absolutely clear that the Board remains convinced that this increase in Directors' remuneration is entirely justified.

"However, proxies are indicating that many small shareholders oppose a movement in fees at this time," says Mr Pryke.

A Wellington shareholder in Contact Energy, David Zwartz, had offered to act as a proxy holder for small shareholders at the company's AGM, due to take place next week. Mr Zwartz also helped to block last year's planned increase.

Mr Pryke claims the company has followed the Institute of Directors' guidelines on the issue, including taking independent advice that concluded a company of Contact's size and complexity, with the degree of commitment required by Directors, warrants a higher level of remuneration.

But he says media coverage has blown the issue out of all proportion so that it is now proving a huge distraction from the real issues confronting the company.

"We could persist with putting this motion to next week's AGM and it may well be carried. But the issue is extremely divisive and is detracting from other more important matters."

Edison Mission Energy director, Bob Edgell, says that while his company was supportive of the proposed increase in remuneration, it was in agreement with the chairman's view.

Under NZSE listing rules, Edison Mission Energy would not have permitted to vote in favour of the resolution.

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