27 Mar 2009

Staff bonuses a commercial imperative - Business NZ

10:30 am on 27 March 2009

The SOE minister, Simon Power, has expressed concern that state-owned companies paid about $50 million in bonuses last year.

Mr Power says the bonuses were paid in the last financial year under the previous Labour-led government. He says given the current economic times, he expects SOEs to show restraint.

He says he will be raising the matter at a meeting he has called with the chairs of SOEs on 9 April to discuss financial performance.

But the chief executive of Business New Zealand, Phil O'Reilly, says the bonuses are appropriate because SOEs have to compete with the private sector for workers.

He says bonuses in the private sector are likely to be much harder to come by this year due to the current economic climate.

Solid Energy responds

The head of Solid Energy is defending the bonus payments it made to its staff. Don Elder, told Morning Report a percentage of all Solid's Energy's employees' remuneration is based on performance.

He says staff only receive this portion if they, and the company, perform well.

Last year, Solid Energy returned a record profit of $146 million before tax, with $5 million paid in bonuses.