Thursday, April 04, 2013

Management pillage at Mighty River

National's privatisation of Mighty River Power is already paying off. Not for us, but for its board. They've just given themselves a nice, fat 73% pay rise in anticipation of privatisation.

The "justification" for this is parity with private-sector directors; the unstated assumption is the usual claim that if you pay peanuts you get monkeys. But Mighty River was well-managed at the previous pay rates, delivering strong dividends and winning awards. I doubt the directors will be performing 73% better than they were last year, and likewise I doubt they'd criticise their previous performance. The pay rise is thus totally unnecessary, a perfect example of the private-sector disease of management pillage (in which management gives themselves huge salaries and bonuses while screwing shareholders).

While it is a small amount compared to the size of the business, this pay rise is money stolen from shareholders, stolen from us. Mighty River's directors should give it back, or resign.