The Shareholders' Association says SkyCity Entertainment's performance hasn't been good enough to justify increasing its directors fees by up to a third.
The listed-casino operator is seeking shareholder approval to lift its director fee pool from $950,000 to $1.3 million.
SkyCity says the increase is needed because directors' work is becoming increasingly more complex and time-consuming, and it wants to attract highly-capable directors from both sides of the Tasman.
But the Shareholders' Association's corporate liaison director Des Hunt says it is unacceptable for firms to increase directors fees by more than inflation, without returns to shareholders improving too.
He says a CPI catch-up would have been reasonable because directors have not had an increase for four years, but to go for 33.3% increase in today's climate when everyone else is struggling, their performance hasn't justified such an increase.
Mr Hunt says the association suggested they take half the increase now and the other half next year if the company has a good year.
He says firms should review directors' fees every two years, to prevent big catch-up hikes which alarm investors.