Ratepayers’ insurer wants to hike fees
‘‘There’s absolutely no way they can justify a huge increase in directors’ fees.’’ Hutt City councillor Max Shierlaw
A ratepayer-backed insurer is seeking permission to hike directors’ fees by 15 per cent, even though it is unable to write new business.
Owned by councils around New Zealand to offer building protection insurance, Civic Assurance recently paid out New Zealand’s largest ever insurance claim to the Christchurch City Council.
The 2012 earthquakes cut its reserves and caused its credit rating downgraded.
Civic Assurance now has only a provisional licence from the Reserve Bank, with conditions including that it is not allowed to write new policies until its licence is restored.
But in the lead-up to its annual general meeting, the Wellingtonbased organisation is seeking to raise the amount it pays directors by 15 per cent.
In 2014 Civic Assurance hiked its fees by 20 per cent, a year after the councils which own the organisation voted down its attempt to raise fees by 50 per cent.
Elected councillors may not get to vote on the increase because of the timing of the AGM on June 19.
If approved, chairman Tony Marryatt, the former chief executive of the Christchurch City Council, would see his fees increase by more than $6000 to $47,438, while ordinary directors would get another $3000.
Chief executive Tim Sole said an Institute of Directors survey showed directors’ fees had risen by 15 per cent in two years.
None of the directors had complained about current fee levels, Sole said, and Civic Assurance was not concerned about the quality of its current board.
‘‘This is a small board with a lot of responsibility. None of them do it for the money; they do it because they’re interested in what they do,’’ Sole said.
Both of the directors who are due to retire by rotation this year – Marryatt and Local Government Funding Agency chief executive Mark Butcher – have offered themselves up for re-election.
Sole said Civic Assurance’s pay put it in the lower quartile of directors’ fees. ‘‘It’s been a very busy period for the board. I don’t think it’s unreasonable.’’
In the two years since the last fee hike, inflation has increased by 1 per cent. If the increases were linked to inflation, Marryatt would have received a $412.50 increase, while directors would have received a $206 increase.
The part-time roles see directors attend eight meetings a year.
Hutt City councillor Max Shierlaw said directors’ fees surveys were typically used to justify increases, but the organisation, like other public bodies should be showing restraint.
Councils voting on the pay hike should seek a mandate from their elected councils. But because of the timing, during annual plan preparations, few councils would get to do so, Shierlaw said.
‘‘There’s absolutely no way they can justify a huge increase in directors’ fees.’’
Wellington deputy mayor Justin Lester said fee increases for organisations owned by councils should be voted on by elected officials. ‘‘This is bad timing; it’s bad process; it’s not something to be supported at a council level and I’ll ask for it to come to council for a decision.’’