"Cabinet has agreed to adjust the level of fees Mighty River Power directors are paid to bring them more into line with comparable listed companies", Mr Ryall said in a statement.
"Fees need to be at a level that will attract and retain directors who have the required governance skills to operate effectively in a listed company environment."
When the company is listed, which is expected to happen next month, annual director fees will increase from $49,000 per year to $85,000 for each director, an increase of just over 73 per cent.
Chairwoman Joan Withers' fees would rise from $98,000 to $150,000.
There will also be a general pool of $85,000 for committee work to be distributed by the board, Mr Ryall said.
"We are advised that the current fees for MRP directors are well below those paid by comparable listed companies. We understand directors of similar sized companies listed on the NZX currently receive at least twice the current MRP fees, if not more", Mr Ryall said.
He pointed out Contact Energy paid its directors $115,000 a year, Air NZ paid $82,000, Telecom $130,000 and Trustpower $75,000.
"We have made a reasonable but conservative increase to MRP directors fees to compensate for the increased responsibility in their new roles, and the added risks around being on the board of a publicly listed company", Mr Ryall said.
