The Interview: Phil Pryke, never far from controversy

By Patrick Smellie

Outgoing Contact Energy chairman Phil Pryke. Photo / Mark Mitchell
Outgoing Contact Energy chairman Phil Pryke. Photo / Mark Mitchell

Phil Pryke was never one to shy away from controversy.

If anything, his preference was to run head on into it with a grin that was half clenched jaw, half twinkling eyes, and a tendency to survey the subsequent wreckage with a combination of rueful surprise and just a smidgen of secret delight.

Mostly, it was water off a duck's back for a guy who shareholders and taxpayers alike came to associate with a mix of arrogance and greed.

Yet the first commercial act in this country by the Australian prawn fisherman-turned-hippie, who washed up here in the mid-1970s, may have been helping to establish the community-owned store in the remote Coromandel settlement of Colville.

"I never lived in a commune," he says defensively, while confessing: "We did live alongside several communes" in a lifestyle funded by stints as a Third World fisheries consultant for various international agencies - a job he fell into on the basis of a combination of charm and native intelligence.

A few weeks in-country, a few weeks in Rome writing up the results, and then back to Colville.

"We were the most comfortable hippies in Coromandel," he says of his life with the first of several Mrs Prykes, whose accumulation, along with an early taste for what an unexpectedly high income can bring, can explain Pryke's reputation as a man also never shy to ask for a raise.

The radical communitarianism of 1970s Coromandel is unlikely to be what Pryke will be remembered for.

His sometimes flamboyant involvement at the heart of the economic reforms of the 1980s and the privatisations of the 1990s made Pryke, if not a household name, then a poster boy for everything old New Zealand hated about the new New Zealand that began to emerge.

The tired joke is that his surname should be pronounced without the "e".

"I was on the periphery of the most extraordinary upheaval you can imagine," he says. With his background in global agencies working with dysfunctional governments in struggling states, it was a revelation to find himself "in this little crucible" where you could watch a big policy change race through a country so fast.

"It was incredibly tough on communities," he says now, recounting the stress he recalls on then Treasury Secretary Graham Scott's face on a day when "unemployment was climbing to stratospheric levels".

"Nonetheless, they had to stay the course."

New Zealand is better off for the changes in the mid-80s, despite some mistakes, and nobody today would argue otherwise, he says.

Under the grill - Contact Energy Deputy Chairman, Phillip Pryke, is questioned by Shareholders Association chairman Bruce Sheppard, during the company's annual meeting. Photo / Brett Phibbs
Under the grill - Contact Energy Deputy Chairman, Phillip Pryke, is questioned by Shareholders Association chairman Bruce Sheppard, during the company's annual meeting. Photo / Brett Phibbs

Those who've worked close to him agree on the arrogance of such certainty, but saw too the kind of bulldozer personality which gets stuff done, an astute business brain born of experience rather than formal corporate training, an iconoclast who knew his own mind.

"I always think of Phil as the board's accelerator - vital for speed - as long as other board members help to steer and the car has good tyres," says one long-time adviser.

Pryke would say he was less often wrong than he was right, even when he lost.

"I think I'm tactically naive sometimes," says Pryke, 63, relaxing in the chief executive's suite at Contact Energy a day before his last annual meeting as chairman of the company he helped to establish 20 years ago.

READ MORE
Phil Pryke to leave Contact board after 20 years

"I get in my head that this is the way it should be. Some might call it arrogance. I've been naive about people not seeing the logic of my thinking."

He regrets not considering his long-term reputation early enough.

"I've got a big mouth, as you know," he muses.

"I didn't care enough about how I was perceived," says the inaugural recipient of the New Zealand Shareholders' Association Golden Glob award in 2002, from his nemesis, the helmet-horned founder of the association, Bruce Sheppard.

As chief executive at the Health Funding Authority in the late 1990s, his $27,000 a month for a three-day-a-week contract was a talking point in Parliament, along with that hardy perennial news story - the pricey furnishing of offices with taxpayers' funds.

Hansard from September 1999 records then Health Minister Wyatt Creech gleefully confirming that Winston Peters was Minister of Finance when Pryke was appointed to the HFA, where $1000 chairs were part of a $7.5 million fit-out of the freshly refurbished Old Bank Chambers in Lambton Quay.

A penchant for revamped historic buildings was just one feature of Pryke's preference not to be ordinary. When Contact Energy sought permanent offices, they were on the former trading floor of the old DIC building in central Wellington - a high-ceilinged cathedral of an open-plan office, made funky.

Shareholders association Chairman Bruce Sheppard (left) after the press conference with Contact Energy Ltd Chairman Phil Pryke. Photo / Glenn Jeffrey
Shareholders association Chairman Bruce Sheppard (left) after the press conference with Contact Energy Ltd Chairman Phil Pryke. Photo / Glenn Jeffrey

Previously notorious for the silver palm trees and Arabian nights tents installed by the failed former government investment bank, DFC, the space already had a chequered history.

When Pryke was enthusiastic about installing avant garde art - described by one observer as "milk bottles with light bulbs in them" - he had to be persuaded the look was all wrong for a state-owned enterprise.

That pattern continued. Preparing Pryke for shareholders' questions at annual meetings became an art form.

In investment and political circles, he was already both prominent and controversial - the first and at the time only "white guy" on the Maori Fisheries Commission; a New Zealand Film Commission member; a former senior adviser at broking house Buttle Wilson who was deeply involved for the Treasury in the $4.25 billion Telecom float in 1990; a cultivator of friends in high places.

When Pryke wanted a job, he would hire a lobbyist to press his case. Knowing the media loved to poke pins in him, he sought out and befriended senior journalists. He was good company at lunch, a staunch supporter of righteous causes.

Asked how he reacts to the recent advertisements backed by former Act and National Party leader Don Brash suggesting freshwater policy is creating unjust privilege for Maori, he's characteristically blunt.

"I would tell them f ... off," he says. "The fact is that these people who espouse that form criticism also espouse a belief in contract, justice and so forth.
"No matter how you read the Treaty of Waitangi, the fact is that that was an agreement between sovereign peoples. It's right there in the first six lines. Give me a break. Just because the white guys won doesn't abrogate those agreements."

However, it was in the execution of his duties as an independent director of Contact Energy that he ran into the most flak - for appearing to favour anything the majority shareholder recommended through to his tin-eared push for higher directors' fees in 2008, just as the global financial crisis unfolded and six weeks out from a general election.

"New Zealanders don't like people being paid," he observes grimly.

He says he now regrets making the "very, very marginal call" to support a takeover bid in 2001 by Contact's first cornerstone shareholder, Edison Mission Energy.

The damage inflicted by that support rebounded doubly in 2004 when the new cornerstone shareholder, Origin Energy, attempted a merger between the two companies.
It's a deal he says would have enriched Contact shareholders. but which never stood a chance against the visceral opposition of the New Zealand investment and business community.

"Even today, at Origin's parlous state, New Zealand shareholders would be better off," he says. "For the following eight or nine years, New Zealand shareholders would have been two to three times better off.

"But I called it wrong in a tactical sense. I decided on the day that I would be completely honest with all the audiences about support for [the merger proposal]."

Having ordered plenty of independent reports from consultants who produced the results the client wanted, he says he was cynical about the process that said he should wait for a third party's recommendation.

"I was naive about the iconography of Contact as the only listed company in the sector, the community sense of ownership," he says now.

"There was an enormous amount of self-interest by local institutions, who bagged us and me personally incredibly heavily because they could see that in a dual-listed environment, institutional decision-making would go to Sydney."

Eleven years on, and a couple of other unhappy deals later - particularly the sale at an inflated price of Rockgas by Origin to Contact - that reputation remains entrenched.

When Pryke's post-Origin re-election to the Contact board loomed last year, institutional shareholders took their chance to say they didn't want him back.
Although that's not Pryke's version of events.

He scoffs at the suggestion - shared in the "nod-nod-wink-wink" way of New Zealand's clubby top end of town way - that institutional shareholders who'd long ago lost faith in him as a truly independent director of Contact had led him to the wall and shown him the writing.

A Devon Funds Management newsletter last September claims the Shareholders Association was "instrumental in ensuring a smooth transition of the chairmanship of
Contact Energy from Phil Pryke to the highly respected [Sir] Ralph Norris".

"That's bullshit, just bullshit," Pryke says, suddenly chippy in an interview marked by wistful reminiscence and gratitude for a country that, on the whole, treated him harshly as a person, albeit generously as an employee.

He not only approached Norris but had to persuade him to take the role - a mission some shareholders may have questioned when Norris, a former Origin Energy director, managed to refer to Contact as Origin by mistake on three occasions at the annual meeting.

Retiring from the Contact board was all his own work, Pryke insists.
"What would I have done if I wasn't up for re-election? I think I would have come to the same conclusion. There was enough noise about 'too long' and the controversies of the past."

But back in August, when Origin Energy quit the controlling stake it had held in Contact since 2004, Pryke was planning a charm offensive with retail and institutional investors to try to preserve his place on the board, if not as chairman or deputy chair - the two positions he's held since day one in 1995 - then as a director.

"I think I've got lots to contribute," he said back then.

Unfortunately for Pryke, he was more or less alone in that assessment. Inside Contact itself, there was no enthusiasm for such a campaign.

At the annual meeting, it was difficult to find a shareholder unhappy with his departure. In the midst of a loquacious ramble from the departing chair, one shareholder piped up with an unceremonious: "Just answer the question."

Perhaps as a result of such deep antipathy from many quarters, there's a loneliness that lurks just beneath the surface of the outwardly uber-confident Pryke, who insists that time alone with a pot of varnish and an old boat to restore is one of his favourite things.

The charmer who says he advanced because he's always been "someone who's winkled his way into the affections" of more powerful benefactors insists it's been a wonderful ride.

"I've always been someone who enjoys throwing stones in puddles. Even when you're wrong, it always achieves something."

And there's that clenched-jaw grin again.

Disclosure: Pattrick Smellie was a communications manager at Contact Energy from 2001 to 2008.

Photo / Mark Mitchell
Photo / Mark Mitchell

Phil Pryke

• Age 63
• Involved with Contact since its establishment in 1995, retired from the board in 2015.
• Board member of Goodman Group, North Ridge Partners, Tru-Test Corporation and Goodman (NZ).
• His previous roles include vice-president, global sales and client solutions for Asia Pacific at Electronic Data Systems, chief executive Nextgen Networks and chief executive • Lucent Technologies Australia.
• Bachelor of Economics from the University of Sydney.

- BusinessDesk

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2016, NZME. Publishing Limited

Assembled by: (static) on production bpcf03 at 28 Sep 2016 03:36:58 Processing Time: 754ms