SOE bosses escape salary clampdown
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.
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.