Cost of airport direction contentious
Palmerston North Airport directors have received a pay rise, but it’s been pegged back substantially after a closely fought council table tussle.
A narrow majority of city councillors has voted to support Cr Karen Naylor’s push to shave $16,000 off the budget for the five directors’ remuneration, meaning their rise is 20 per cent, rather than the 37 per cent originally proposed.
On one side of the debate, Cr Lorna Johnson said the proposed increase was ‘‘shameful’’ when the council would not even pay its own workers the living wage.
But mayor Grant Smith and finance and performance committee chairwoman Susan Baty said the council had to pay directors what they were worth to get the results it wanted. The Institute of Directors’ fees survey for 2017-18 showed the median remuneration paid to directors of companies with annual revenue of $5.1 million to $10m was $24,500, and $41,600 for the board chairman.
Palmerston North Airport’s operating revenue was $8.5m in the year ending in June. Its proposal was to pay directors $21,500, with $24,500 to the chairman of the audit and risk committee, and $35,000 to the chairman.
That would have cost $124,000 in total, for each of the next three years. The total would have been more than the airport directors’ budgets in Nelson, Dunedin, Hawke’s Bay and Hamilton.
The council’s 8-7 vote reduced the total Palmerston North Airport budget for directors’ fees to $108,000.
Smith opposed the cut and said he was surprised a proposed saving of $16,000 was provoking so much debate. ‘‘This is a really low figure.’’
He said the full increase ‘‘absolutely stacks up’’ in comparison to what other directors were paid and what other regional airport company directors were paid.
The airport company returned a $643,000 dividend to the council as its only shareholder last financial year, and saw a record number of 657,000 passengers through the terminal building in the year just gone.
Its value to the city and region was about more than just the financial returns, Smith said. Its performance was in contrast to other regional airports, which were more likely to be asking councils for money than returning dividends.
Cr Jim Jefferies said paying people the market rate for the job they did was fundamental to attracting and keeping quality people in charge.
He said the airport business demanded a high level of understanding of the complexities of pricing, of setting landing fees, and, increasingly, managing significant property development.
The other councillors who opposed clipping the directors’ fees increase were Adrian Broad, Gabrielle Bundy-cooke, Leonie Hapeta and Duncan Mccann.