Heffernan leaves next year with $500k special payout

Doug Heffernan

Founding chief executive of Mighty River Power Doug Heffernan will leave the company after 16 years at the helm under arrangements that trigger a $500,000 retention payment on top of his existing salary of almost $1.5 million last year.

The arrangements mean Mr Heffernan will see through the company's partial privatisation and its first full financial year as a publicly listed company.

MRP chairwoman Joan Withers announced Mr Heffernan had undertaken to stay on in the role through to the preparation of accounts for the year to June 30, 2014. He will work through to August 31, next year.

A variation to his contract, disclosed last year, allows him a $500,000 retention payment for staying on until December 31, 2014.

The government is preparing to sell up to 49 percent of MRP in a share offer to the public next month, with listing on the NZX and ASX expected before the Budget, in mid-May.

MRP had previously announced a variation to Mr Heffernan's contract, creating a fixed term to either December 31 this year or, at the board's option, to December 31, 2014, which would trigger the retention payment.

MRP was not able immediately to confirm whether departing four months earlier than that would reduce the extent of the one-off payment for Mr Heffernan, who was named CEO of the year at last year's Energy News industry awards.

"We are fortunate that Doug, our chief executive since the company's formation in 1998, has committed through to the finalisation of the accounts to the end of the 2014 financial year, a period in which there will be a lot of eyes on MRP and our performance," Ms Withers says.

"This provides the board with certainty and the ability to plan for the succession process and appointment of a new chief executive."

She says there has already been considerable thought given to planning for Mr Heffernan's departure, with a recruitment process expected to begin late this year.

(BusinessDesk)

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19 Comments & Questions

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So if:

70% of Heff's performance incentive was focused on the "success" of the Southern California GGE Fund

which was written down each year (cumulative write down, say $50m) and

cost $25m to get out of its deeply flawed structure and get residual cash back

how much of the $2m Heff will pocket next year can MRP expect to recover from him?

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This is obscene and morally indenfensible... We grizzle and grumble about beneficiary fraudsters, drug dealers and low-life criminals, yet this sort of "special payout" is far more damaging. The reason? It gives every other citizen a self-justification to rip anything where they can.

No doubt he will be awarded with some sort of gong and he will pop up wtih a jobs for the boys role on equally absurd money.

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Will Heff be refunding any of his $2m earn next year for his less than stellar helming in recent years through the fields of gas exploration and offshore geothermal investment mis-structuring?

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...and when he cashes up the shares he will have been given in the float he will be a multimillionaire!!!

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These kind of inane comments are why no executive in their right mind would want to work in NZ. I would bet that none of the people commenting above have the skills or experience to do a job like Doug Heffernan's.

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Skills and experience he may have. It's the corporate behaviour of self-entitlerment that is the issue ... the belief that somehow they are worth so much more than their fellow citizens. It's called greed.

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Rubbish. His remuneration was set by a board appointed by the shareholder - the Government.

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Lindsay,
Now you might understand why people invest in property and not on the stock market.

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Plenty do, Lindsay.

And they do very well for shareholders and the NZ economy.

Eg. Ralph Waters, Dennis Ferrier

Like all things, there are those who are hired from within NZ and showed they have no ability to do the job.

Eg.

Hugh Fletcher and his debt destruction of Fletcher.
Don Brash with his double dip recession destruction of NZ economy.

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I'm sorry, but how did Don Brash cause the double-dip recession?

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You are quite wrong about Don Brash. I was on the Reserve Bank Board at the time and you don't know what you are talking about.

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How did Don Brash caused the double dip recession of 1997 to 2002?

Don Brash kept interest rates high during the Asian financial crisis from July 1997. Other central banks aggressively cut interest rates.

It was only in Mar 1998 that Brash allowed interest rates to fall. One month BBR in Feb 1998 was close to 10% - by Jan 1999, it was down to 3.6%.

When the first signs of growth emerged in 1999, Brash increased interest rates again from Sep 1999. Other central banks continued to keep interest rates low. By May 2000, 1M BBR was back up to 6.7%.

Brash choked off growth and the NZ economy went back into recession - double dip.

When it became very clear that he had completely misjudged economic conditions, Brash started cutting interest rates from Mar 2001. OCR was ct from 6.5% in Mar 2001 to 4.75% in Nov 2001.

Proof :

http://www.rbnz.govt.nz/monpol/statements/0090630.html

What kind of idiot runs monetary policy like that? Brash was like a half-wit in charge of a car and driving with both eyes on the rear screen mirror.

Of course, Lindsay would defend Brash! He was complicit in allowing Brash to drive in a drunken manner (monetary wise).

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How could you go wrong running a company which has limited competition, while power bills have increased?

It's a no brainer.

What makes you qualified to make a judgment? Isn't your experience limited to PR skills, being the advocate you are. You'd do much better selling vacuum cleaners or as an oil and grease changer.

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No CEO can be effective in a role after 16 years... the man needs to step aside and let some of the younger talent come through and shine.

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Would that comment be from the same Lindsay Fergusson who heads the Business Roundtable? Of course, you'd see huge bonus payouts for the boys as being completely justified. Those who see taxpayers as perfectly valid targets will always trot out the "they were asking for it" argument. No wonder this country is in such a mess.

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I am not the head of the Business Roundtable, and never was. However, I have had over 20 years of international business experience at board and CEO level. I believe I am far better qualified to comment on CEO pay than the commentators here, who don't even have the guts to use their own names when posting their comments.

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The quality of CEOs worldwide is substandard.

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Obscene - and probably more than most will earn in their whole lifetime.

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The man has been (over) paid to do this job for the last 16 years, why does he now need money to leave? This is immoral.

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