City Care fails targets, boosts CEO pay
A council-owned construction and maintenance company has undershot all its financial and work safety performance targets but the chief executive enjoyed a significant pay rise.
City Care attained a media profile last year when the Christchurch City Council investigated selling it, and then abandoned the plan because the bids were too low, to the relief of lobby group Keep Our Assets, led by John Minto.
Revenue and profit were down, but a higher dividend – still below target – was paid to the council by raising debt levels, also breaching targets.
Chief executive Onno Mulder enjoyed pay of $710,00 made up of a fixed payment of $547,000 and incentive pay of $163,000, compared with his 2016 pay of $585,000, but shy of 2015’s $784,000.
The incentive was for the previous year’s performance when the profit was double this year’s.
‘‘While I concur that the results fell short of our budgeted expectations, the business has still been able to pay strong dividends to our shareholder because of robust financial management and hard work of our people,’’ Mulder said.
The after-tax annual profit of $3.5 million was well below with last year’s $6.8m and the forecast target of $8.4m. Revenue was down at $303m, below the $332m target.
Debt levels were higher to pay for a bigger $6.2m dividend, but down on the target of $6.4m.
City Care also undershot its safety target of reducing workplace accidents by 5 per cent.
Mulder said City Care was moving out of a number of contracts and dealing with an industry-wide tightening of the construction market in Canterbury.
‘‘That said, our outlook for 2018 is positive due to the award of a number of key new contracts.’’
In June City Care was awarded council facilities management contracts in Auckland and Christchurch, a roading maintenance contract for the Christchurch City Council, and a new 10-year maintenance contract with Christchurch International Airport, Mulder said.
One of the company’s biggest contracts is for Auckland’s Watercare. In Christchurch it is leading the rebuild of Victoria Square.
Just-retired chairman Hugh Martyn declined to comment about the company’s performance.
Sixty-five employees took home pay of more than $100,000, while 51 were paid more than $110,000, 25 more than $120,000, 18 more than
$130,000, 16 more than $140,000, and
41 between $150,000 and $430,000.