Who is Adrian Orr, the million- dollar man?
Top civil servant at centre of pay fracas a man of contrasts, writes Matt Nippert
Adrian Orr comes from economics and public sector finance — a dry world appreciative of discretion — but is willing to publish spurious correlations for a laugh and joke about backyard hangi.
He’s pale- skinned and ginger and has also been named the Pacific Islands businessman of the year.
The surprising contrasts don’t end there.
Last year the Taupo- born government banker needed to borrow $ 1.80 from a fellow passenger to pay for his North Shore bus fare — going as far as to open his wallet to show it was empty of cash. About that time he also gained national notice as the public sector’s first million- dollar man.
Orr is well- known in the business community as the long- running chief executive of the New Zealand Superannuation Fund, but it was only this week he became publicly famous after it was revealed that Prime Minister Bill English had criticised his recent 23 per cent pay rise.
Orr had rubbed shoulders in the public sector pay ranks with the likes of the vice- chancellor of Auckland University, Chief Justice of the Supreme Court, chief executive of the Accident Compensation Corporation, and the governor of the Reserve Bank, but this recent increase — to $ 1,030,000 in the year to June 2016 — made Orr the runaway leader.
English warned, after Fairfax political reporter Sam Sachdeva had used the Official Information Act to dig up his objections, that the fund’s board was skating on thin ice in running counter to his wishes.
“The Government has a view and the board’s taken a different view. I think any board that takes a different view when it is a 100 per cent subsidiary takes risks about tenure and that will be discussed when the appointments come up,” English said at his post- Cabinet press conference on Monday.
Orr was not available to be interviewed this week. His office said he was on business overseas, but even without criticism from the PM ringing in his ears he has been known to walk out of media interviews when the subject of pay is raised.
Despite this sore spot, he has been remarkably open about the rest of his life, extensively discussing his past and future and displaying a willingness to occasionally step outside his brief for comic effect.
At the National Bank in 1994, he wrote a tongue- in- cheek study running the rule over the folk wisdom that All Black defeats in an election year give an advantage to opposition candidates.
Recalling in 2007 the results of this exercise, Orr said: “It’s stretching the memory, but I think the results showed incumbent governments are generally
Orr is a director and shareholder in indigenous tourism venture Kai Waho, but the company’s frontman, Thomas Loughlin, was unwilling to talk about their long relationship.
“He’s a brother, eh? I’d best leave it there,” Loughlin said when contacted this week.
Orr went on to study in the Waikato before working in Wellington, first for the Treasury and then for banks. He is married to novelist costs from 2040. While a Labour creation, the occupation of the Treasury benches by National in 2008 saw the fund kept in place — although fresh contributions to it were suspended. This independence, however, has also led to this week’s standoff with the Prime Minister, with the board arguing Orr’s pay was in line with the market and well- deserved. Private sector fund managers were unusually unwilling to comment publicly this week on the issue of Orr’s remuneration — partly because they either had or sought business with the Super Fund, and partly because they thought the Prime Minister had a point. Said one of Orr’s milliondollar- a- year pay packet: “It does seem extraordinarily high. I can’t imagine anyone I know here who would get that.” Part of this pole position can be explained by scale. The Super Fund, with $ 33 billion under management, dwarfs any local comparison. Similar- sized Australian retirement funds have chief executives paid similarly to Orr, although one local fund manager notes they also have to manage skittish investors who can vote with their feet.
Orr was asked in 2012 whether a jump to the private sector had any appeal. He claimed it didn’t.
“No, I really enjoy the purpose of this fund and what it’s about. If I was going to be doing this kind of role in this industry, it wouldn’t be a retail fund. There are very few globally who are truly long- term intergenerational investors. It’s a rarefied atmosphere,” he said.
This rare atmosphere has meant the fund has engaged in some exotic activity, buying catastrophe bonds from insurers, taking positions on life insurance contracts, and dealing with the likes of Goldman Sachs.
While the fund is internationally recognised as having performed well — the Financial Times said it was the best government- run fund in the world in 2015 — it hasn’t all been smooth sailing.
In late 2014 it lost $ 200m invested into an ailing Portuguese bank. While Orr put a brave face on the episode and said the fund had a strong claim to recover the sum, it was written off in the fund’s accounts and two years into subsequent legal action, courts in the United Kingdom are still hearing arguments over jurisdiction.
But, on the whole, the Super Fund under Orr has been adroit in adapting to conditions, growing an average of 9.9 per cent a year since inception — a period that included the volatility of the global financial crisis, the spectre of Greek default and a surprise Brexit.
Early criticism over its investments in nuclear weapons and cluster munitions was quickly resolved and the fund has since been a mainstream leader in running investments that are simultaneously responsible and profitable.
This week’s clash with the Prime Minister marks the first time the NZSF has run into direct criticism from its public shareholder, although it is difficult to determine exactly how much of the current storm is theatre.
English wrote his tut- tutting note after being made aware the NZSF board had proceeded with the pay rise in July 2016, writing, “If asked I will publicly state I opposed the increase”.
And indeed he kept his word, and only discussed the issue this week after it was reported.
He also noted at his press conference, aside from the divergence on the issue of chief executive pay, he was pleased with the NZSF’s performance.
Orr may, however, be giving some thought to outside opportunities. As he said in 2007 when asked how to best conduct a hangi: “Always have your contingency on the side — which is a barbecue with a full gas bottle — just in case.”
Orr was asked in 2012 whether a jump to the private sector had any appeal. He claimed it didn’t.