CEOs take $1.3m after pay cut

By John Cousins, Carmen Hall

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Vince Hawksworth.
Vince Hawksworth.

Two Tauranga chief executives were paid more than $1.3 million each last year despite both taking pay cuts, new figures show.

The high wages reflected market rates "nothing more, nothing less", a business leader said.

An NZME survey covering the heads of New Zealand's top 50 listed companies for the 2015 financial year revealed Trustpower chief executive Vince Hawksworth's was paid $1.35m, down slightly on 2014. Port of Tauranga chief executive Mark Cairns took a 9.3 per cent hit, getting $1.32m - down from 2014's $1.46m.

Mark Cairns.
Mark Cairns.

Priority One chief executive Andrew Coker said when companies looked nationally or internationally for high quality people, they had to pay the market rate.

"That is what is reflected in those levels of salary, nothing more, nothing less. Chief executives are absolutely vital and are like the skippers with their hand on the tiller in stormy seas."

He said Trustpower, Comvita and the port were quite small businesses in the not too distant past and had created job opportunities with sustainable growth.

Port of Tauranga chief executive Mark Cairns was asked how he justified getting paid $1.32 million year. "I accept it is a lot of money and is very generous."

He explained that 60 per cent of his benchmarked salary was at risk from the performance component of his job. He was assessed against explicit criteria.

Mr Cairns said his $138,000 pay reduction from 2014 was because the port had flat earnings after coming out of a year of heavy spending.

Mount Maunganui and Tauranga Maritime Union secretary Selwyn Russell said he understood that Mr Cairns was doing a good job. "But the fact is, his pay is so high compared to the workforce. I would like to see some of those vast profits trickled down to the workforce. It would be nice to get a bit of the gravy off the plate."

Trustpower chief executive Vince Hawksworth said he accepted wholeheartedly that his salary could be viewed as a good one but at the end of the day the board determined overall salary expenses and his pay was determined by his performance.

"I am ultimately accountable to shareholders. Badly performing CEOs can be moved on fairly quickly."

Asked why his pay of $1.35 million had dipped slightly from 2014 after a $350,000 pay increase on 2013, he said the business had grown rapidly up to the year before last in Australia and that led to the uplift.

New Zealand Shareholders Association chairman John Hawkins said Mr Cairns' pay was not out of line for a company with a market capitalisation of nearly $2.6 billion.

He said Mr Cairns' salary had to be viewed from the perspective that the Port of Tauranga was the best port operation in the country by quite a long way.

The dividend to shareholders was up 4 per cent. "Overall, shareholders have done better than the CEO."

Meanwhile the data showed Comvita paid its former chief executive Brett Hewlett $610,000 in 2015, $530,000 in 2014 and $430,00 in 2013.

At the end of last year Scott Coulter stepped into the role and earlier this week Comvita announced an annual profit of 68 per cent as Australian sales soared, overtaking New Zealand as the manuka honey company's largest market. Meanwhile the company shares had also tripled in the past year, hitting a record high of $12.40 last month.

Fonterra chief executive Theo Spierings commanded the largest pay packet of the publicly listed companies on $4.94 million in 2015 - up from $4.18m in 2014 and $3.52 in 2013.

His pay came under fire when it was first revealed last September, around the time the co-operative prepared to lay off 750 staff. He had requested a salary freeze.

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