Mayor irked by pay of Watercare boss
Goff says $775,000 is too much and more than the council chief executive gets, writes Bernard Orsman
The $775,000 salary of Watercare boss Raveen Jaduram is under fire as Auckland heads into a summer of severe water restrictions. Auckland mayor Phil Goff is among those unimpressed at the size of the salary, saying no one on the ratepayer payroll should be paid more than the council chief executive, who earns $600,000.
The criticism stems from the most severe drought in Auckland’s history, leading to emergency spending of $224 million to bolster the city’s water supply, restrictions on using hoses and water blasters and a four-minute limit on showers.
If the weather forecasts are correct and not enough rain falls in winter and spring, Watercare has raised the possibility of turning off the taps and making people queue for water at hydrants during summer.
Jaduram is the highest-paid boss at the Super City. He takes home 30 per cent more than the new chief executive of Auckland Council, Jim Stabback, who has the biggest job in the council group.
When Stabback begins work on September 1, his salary of $600,000 will be $98,000 less than his predecessor, Stephen Town. Auckland Transport chief executive Shane Ellison, with a bigger and more complex job than Jaduram, is paid $565,000.
At the other council-controlled organisations, Regional Facilities chief executive Chris Brooks is paid $480,000 and Ateed chief executive Nick Hill is paid $425,000. Panuku boss Roger MacDonald was paid $645,000 before he resigned last November. He has not yet been replaced.
The letters page of the New Zealand Herald and social media are damning of Jaduram’s handling of the drought crisis and the size of his salary.
“He has been employed since February 2014 earning the most ridiculous salary and Auckland’s water system is a shambles,” said Forrest Hill resident Lorraine Mulligan.
“This is gross incompetence and Jaduram should resign or be sacked and his $770,000 salary halved and paid to a more competent person,” said John Hodgson, of Morningside.
Not only is Jaduram top dog in the council salary stakes, his salary is up there with some of the biggest jobs and names in the public sector.
He pockets more than the head of the Defence Force, Treasury and Prime Minister Jacinda Ardern, who earns $471,000.
The highest-paid public sector boss is NZ Super Fund chief executive Matt Whineray, who earns $1,065,000.
Fletcher Building chief executive Ross Taylor is the highest-paid private sector boss with a salary of $5.6 million in 2019.
Watercare has a history of fat salaries. Former Watercare board chairman Ross Keenan recalls Mark Ford returning to the water company after setting up the Super City on behalf of the Government.
“He came back on a high and thought he had done a very good job and it was time he was rewarded.
“He was comparing himself to Ralph Norris and felt his worth in the job was $1 million,” Keenan said.
The retired businessman said he laughed at the suggestion and reminded Ford he was not in the private sector and should be rewarded with a salary below council chief executive Doug McKay.
When Ford left Watercare for health reasons in late 2014, shortly before he died, he was on a salary of $860,000.
Jaduram replaced Ford on a base salary of $510,000, rising to a possible $586,500. Between 2016 and 2019 his salary rose from $605,000 to $775,000.
Jaduram declined to be interviewed about his salary, leaving Watercare chairwoman Margaret Devlin to defend the large sum.
Devlin, chairwoman since November 2016 and paid a director’s fee of $108,000 a year, said the salary reflected the size and complexity of the role of chief executive.
She said the process of setting the salary involved the board obtaining independent advice on comparable public and private sector organisations to get a feeling of what was happening in the market. Political and public concerns about salary levels were also taken into account.
There was a fair degree of interrogation at the board level, said Devlin, “and I, and the board, are comfortable that the process is a robust process and gets us to a number that reflects the complexity of the organisation”.
Asked to justify Jaduram’s salary when Stabback earns far less, Devlin said she had confidence in the process followed by the Watercare board and could not comment on the process used by councillors to appoint the council chief executive.
The council followed a similar process to Watercare and came up with a $600,000 figure for Stabback.
Under the Super City legislation, councillors appoint the chief executive of Auckland Council and the unelected directors of the five council-controlled organisations (CCOs) appoint each of their own chief executives.
Devlin did not want to discuss public criticism of Jaduram’s handling of the drought, saying the company was solely focused on the response to the city’s worst drought on record.
“What the board is really focused on is providing confidence to Aucklanders that we are doing everything we possibly can to minimise the impact of the drought,” she said.”
A source told the Weekend Herald the board was taking a hard line with management over performance issues during the drought crisis, echoing concerns of dissatisfaction among elected members.
Asked about Jaduram’s salary, Goff said the council and CCOs needed to be taking a conservative approach to chief executive salaries, saying the $775,000 figure was the legacy of an earlier environment.
“Council and CCOs are public bodies, funded by the ratepayer. While we have to compete with the private sector to recruit and retain talent, we are not the private sector and chief executive salaries should reflect that. That’s in line with the position that the State Services Commission is now taking.”
Goff said that since he became mayor in 2016, every chief executive appointment had been on a reduced salary, including Stabback and AT chief executive Shane Ellison, who was paid about $100,000 less than his predecessor, David Warburton.
He said the $600,000 salary for Stabback was set using local and international best practice to determine chief executive salaries, benchmarked on remuneration data from a range of private and public sector organisations.
Goff said an upcoming independent review of the CCOs would include a look at salaries.
Following criticism in 2017 that one in five staff at Auckland Council was earning more than $100,000 and a top executive pocketed a $405,000 severance payment, Goff said the council had to demonstrate that salaries were not excessive.
Two years later, Goff blew his top when it was revealed that the Panuku board had rewarded chief executive Roger MacDonald with a bonus and pay rise worth $80,000, and bonuses of $1.1 million were dished out to senior executives at some of the CCOs.