Concerns raised over compulsory pay rises
The saga of the Invercargill City Council’s appointment and remuneration of directors policy continues, with concerns now raised about the possibility of compulsory annual pay rises.
Less than a month after amending the policy, councillors were asked to adopt the policy again yesterday with another amendment after it was found the policy had inadvertently required council approval for the appointment of directors to subsidiaries of Electricity Invercargill Limited.
The revised policy excluding that ‘‘unintended effect’’.
However, councillor Ian Pottinger raised concerns about wording in the policy which could lead to directors automatically being given a pay rise annually.
The policy provides that in the years which director’s fees are not reviewed by an external remuneration firm, which was every three years, they would be given an increase in accordance with the June annual CPI.
Pottinger said he had a problem that the wording of the policy said there ‘‘will be’’ an increase, not there ‘‘may be’’.
‘‘We have created something in stone here.’’
His concerns were echoed by the other councillors, who voted unanimously, apart from Cr Karen Arnold who abstained, to have the matter lay on the table. This meant a recommendation that councillors approve a 1.5 per cent increase to director salaries for the year could not be passed. Several conflicts of interests would have likely have been raised for that decision, had the policy been adopted.
On August 28, during discussions on the policy, Cr Allan Arnold tried to raise the issue of whether the council should have councillors as directors of the holding company. It’s a policy that has come before council several times, and it has been controversial, with the auditor-general recommending councils avoid the practice where possible.
The recommendation put to the council then was to amend the policy to extend the appointments committee’s duties, allowing the council to strengthen its control over the director appointment process for all council-controlled trading organisations.
All councillors voted in favour of adopting that recommendation.