More on AECT dividend

David Fisher writes at NZ Herald:

Trustees seeking a fresh mandate from shareholders in the publicly owned $2 billion Vector power company moved the payment date of the $320 dividend closer to the day voting papers were sent out.

Trust chairman William Cairns explained the problem was caused by the trust deed, which required trustees to pay shareholders inside a specific timeframe.

He said it would take a court decision to change the deed.

“To change the trust deed is a lot of expense.”

It has now emerged the trust went to the High Court at Auckland in 2010 and won the right to pay the dividend at any stage of the financial year.

The rule change meant it could have been paid after the election this month. It was paid on September 26, and voting papers were mailed on October 10.

I don’t have an issue with the timing of any payments. Of course politicians will want to pay a dividend before an election, not afterwards. Personally I’d abolish the AECT and hand the shares direct to its beneficiaries and remove the politicians from the picture.

But while not having an issue with the timing, it is a bad look to claim you have little discretion with the timing, and it transpires that in fact you went to court to specifically get flexibility.

The Auckland Energy Consumer Trust owns 75 per cent of power lines company Vector on behalf of 300,000 shareholders.

The five trustees get $340,000 a year in fees. Those acting as directors get about $160,000 each.

That is an average of $70,000 per trustee which seems rather high I have to say for what is a trustee role. The $160,000 for a director of a major commercial company is about right.

As I said, someone should put together a ticket for the AECT that will vow to transfer all their shares to the trust beneficiaries. I suspect they’d win a majority.

The line charge share of the power bill from Vector for the average residential customers has risen from $550 in 2008 to $602 this year.

That’s actually a very modest increase. We’re talking 9.5% over six years which is 1.6% a year on average.