Prime Minister John Key says the decision to pay the chief executive of Mighty River Power a one-off payment of half a million dollars to stay on until next year, is up to the board.
Mighty River is the first state-owned enterprise to be put up for partial sale, scheduled for between March and June next year.
Its annual report shows Doug Heffernan will be paid a one-off retention payment of $500,000 if he stays on until the end of 2013.
Mr Key says that was a matter for the board and the Government was not consulted.
He says the board could argue Mr Heffernan is a critical part of the overall process, and it has used a cash payment to lock him into the business.
Mr Key says having a 26 November date set for a substantive judicial hearing on the partial sale of Mighty River Power will allow the matter to be settled by early next year.
The November hearing will mean the court action is over and done with by early next year, in time for the planned share float, he says.