SOE bosses escape salary clam­p­down

Taranaki Daily News - - Business - Ger­ard Hutch­ing ger­ard.hutch­ing@stuff.co.nz

The Gov­ern­ment has clamped down on the per­for­mance pay of pub­lic ser­vice bosses but no brakes have been ap­plied to the heads of state-owned en­ter­prises.

Steven Car­den, who is the chief ex­ec­u­tive of Land­corp, New Zealand’s largest farmer, took home an ex­tra $90,000 in pay this year to lift his salary to $730,000.

Car­den trails other SOE bosses such as Trans­power’s Ali­son An­drew on $1.24 mil­lion, Ki­wiRail’s Peter Reidy (re­cently re­signed) on $1.18m and Kor­dia’s Scott Bartlett on $1m.

Last month, State Ser­vices Min­is­ter Chris Hip­kins said after the pas­sage of the State Sec­tor and Crown En­ti­ties Re­form Bill through Par­lia­ment, stronger over­sight of the pay for chief ex­ec­u­tives would now come into force.

How­ever, salaries of the chief ex­ec­u­tives of SOEs have es­caped the chop, as the agen­cies are viewed as to­tally com­mer­cial.

SOE re­mu­ner­a­tion is the re­spon­si­bil­ity of the boards that gov­ern about a dozen en­ti­ties.

Re­cently the Gov­ern­ment an­nounced it would strip pub­lic ser­vice heads of their per­for­mance bonuses, a move it ex­pects will help save the coun­try $4m.

Un­til now pub­lic ser­vice chief ex­ec­u­tive re­mu­ner­a­tion pack­ages have in­cluded the po­ten­tial to re­ceive a dis­cre­tionary pay­ment of up to 15 per cent for ‘‘ex­cep­tional per­for­mance’’.

Pub­lic Ser­vice As­so­ci­a­tion na­tional sec­re­tary Glenn Bar­clay said the union was against per­for­mance bonuses for two rea­sons: ‘‘Re­search shows peo­ple get per­for­mance bonuses al­most re­gard­less of how well the or­gan­i­sa­tion is per­form­ing.

‘‘They also lead to un­in­tended out­comes, with peo­ple try­ing to ful­fil a tar­get rather than look­ing to see what’s re­quired for the good of the or­gan­i­sa­tion.’’

Land­corp com­mu­ni­ca­tions head Si­mon King said Car­den’s pay pack­age was made up of a base salary, and an in­cen­tive bonus based on the achieve­ment of key per­for­mance tar­gets agreed with the board each fi­nan­cial year, plus any ad­di­tional em­ployee ben­e­fits.

His to­tal pack­age in the 2016-17 fi­nan­cial year was $539,000, ris­ing to $639,000 last year be­fore reach­ing $730,000 this year.

Boards of SOEs tended to look to­wards the com­mer­cial world when set­ting pay lev­els.

Land­corp’s lat­est net profit was $34.2m and it em­ploys 679 staff mem­bers. For the first time since 2014 it re­turned a $5m div­i­dend to the tax­payer.

An­nual re­ports show when chief ex­ec­u­tives leave they can re­ceive gen­er­ous pay­ments.

While the salary of New Zealand Post boss David Walsh is $896,826, his pre­de­ces­sor, Sir Brian Roche, pock­eted $1.68m when he left last year – made up of a base salary, in­cen­tives and other ben­e­fits, su­per­an­nu­a­tion and ter­mi­na­tion pay­ments.

Quotable Value (QV) chief ex­ec­u­tive Jacquie Barker, who has headed the SOE since 2015, is paid $440,000. She suc­ceeded for­mer All Black Bill Os­borne, who de­parted the prop­erty in­for­ma­tion agency with $1.27m, ac­cord­ing to its 2016 an­nual re­port.

While SOEs such as Land­corp, NZ Post, Ki­wiRail and Met­Ser­vice are house­hold names, oth­ers are rel­a­tively ob­scure.

AsureQual­ity tests for food safety and pro­vides biose­cu­rity ser­vices, for ex­am­ple with the cat­tle disease My­coplasma bo­vis. It em­ploys 1700 peo­ple and its chief ex­ec­u­tive, John McKay, is paid $480,000.

Lit­tle-known Kor­dia is a broad­cast­ing and telecom­mu­ni­ca­tions agency spun off from Tele­vi­sion New Zealand in 2003, which op­er­ates TV plat­forms.

STUFF; SUP­PLIED

Top, Land­corp chief ex­ec­u­tive Steven Car­den has taken home $90,000 more this year, lift­ing his salary to $730,000; above, Kor­dia boss Scott Bartlett was paid $1 mil­lion last year.

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