A 73 per cent pay rise for Mighty River Power (MRP) directors is an appropriate step in listing the company on the public stock exchange, says Prime Minister John Key in Tauranga today.

The Government announced today the annual fees for MRP directors will increase from $49,000 to $85,000, while chairwoman Joan Withers fees will increase from $98,000 to $150,000 a year, when the company is listed.

The pay rise is in preparation for offering minority shares in the company, with cabinet agreeing to adjust the level of MRP directors to bring them more in line with other publically listed companies including Air New Zealand and Contact Energy.

Speaking in Tauranga today, Prime Minister John Key says it is an appropriate time to increase fees ensuring there is consistency across the board.

'It's going to be a publically listed company so it's important to that it attracts the right people and I think it's realistic to be dealt with now because their fee structure is out of whack and it's consistent with what we see in terms of publically listed companies.”

State Owned Enterprises Minister Tony Ryall says the change in fees helps create a level which attracts and retains directors who have the required governance skills to operate effectively in a listed company environment.

'The reason why MRP directors are getting what appears to be a big increase is because of the additional responsibility they are now going to have. There is quite a lot of extra financial and legal responsibility with a company listed on the stock exchange.”

Contact Energy directors receive $115,000 and Air New Zealand directors receive $82,000 while in Tauranga, TrustPower directors get $75,000, marginally less than what Mighty River Power directors will get with a bigger company, says Tony.

'Let's face it. It is still a very big increase in difficult times but this is not a church committee they are running it is one of the biggest power companies in Australasia.”