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The head of New Zealand’s largest listed construction company, building manufacturer and supplier employing 14,500 people has taken a 43 per cent pay cut.
Fletcher Building chief executive Ross Taylor’s pay dropped from $6.5m last year to $3.7m this year with the disastrous SkyCity convention centre copping him a redscore for the company’s inability to keep the lid on cost blowouts.
The company’s annual report issued yesterday with the result for the June 30, 2023 financial year revealed how he has copped the pay cut because he didn’t meet every target, even though mostly he did meet his targets.
Taylor is one of NZ’s highest-paid CEOs, and heads the giant conglomerate with operations here and in Australia.
But yesterday, accounts showed that although revenue rose 5 per cent annually, the balance sheet took a massive $305m hit from significant items including flood and cyclone damage and losses on the SkyCity contract.
He has one performance red mark for “legacy construction projects continue to track within provision envelope”.
That target incentivises him to ensure the hangover from loss-making jobs like the disastrous NZ International Convention Centre holds no further nasty surprise.
Ooops. That hasn’t been the case.
In fact, in the 2023 financial year, Fletcher wrote off $255m on that job alone. Even though it wasn’t Taylor who agreed to build SkyCity’s convention centre, he sure wears the fallout from the financial disaster it turned out to be for this builder.
“Not achieved” is marked alongside that red dot for failing to keep the lid on cost blowouts from bad jobs.
That’s all a big change from last year when he enjoyed a 34 per cent annual pay rise, making $6.58 million, up from the previous $4.91m.
Fletcher Building's CEO Ross Taylor predicts high, post-Covid prices for building materials won't ease for at least another two years. Photo/Greg Bowker
Last year, he stressed the performance-based nature of his pay, saying the amount received was a true reflection of how the company had done: “If I look at my pay, 30 per cent is base and 70 per cent is all down to performance so if I perform, I do better. We’ve achieved as a company. The buck stops here. You get the good with the bad.”
The 2023 annual report showed Taylor achieved on many measures including diversity.
Good green dots were awarded for safety goals and mostly on individual goals including getting more female operations leaders and developing a 2024 plan to do better there.
Safety goals were met via Taylor’s leadership, particularly to get the right behaviours and focus within the business. Injury frequency rates dropped 12 per cent in 2023.
But he got yellow dots indicating partial achievement for group Ebit and group cash flow.
The wiry Australian was called in to repair the construction giant’s shattered frame after it lost nearly a billion dollars on big projects including the NZICC and Commercial Bay in Auckland.
Then, just when the business was looking like it was back on an even keel, along came Covid and Taylor spent weeks in managed isolation as he moved between here and Australia.
The father of four who is a resident of Sydney’s Manly and Auckland’s Parnell likes Cameron Diaz and Kate Winslet blockbuster “The Holiday”, but “Notting Hill” remains his favourite movie.
Fletcher Building CEO Ross Taylor. Photo / Michael Craig
He concedes his family mocks him for being a fan of the films like that romantic comedy set in Los Angeles and England, two women escaping ho-hum lives by exchanging homes, finding delightful and unexpected new romance along the way.
So he’s romcom-Ross.
But he has a serious job and background. Ross Harold Taylor is a civil engineer with first-class honours from Queensland University.
He was born in Queensland, his father working on irrigation sites. But his parents split up and so his mother raised two children. Taylor says she was “amazing”.
He and wife Kathy have four children.
How long he will stay on as Fletcher CEO is uncertain but the company has made no announcements about any planned change or succession.
People tipped by some to possibly take over include chief financial officer Bevan McKenzie but he has never discussed that option.
Australians Ralph Waters, Jonathan Ling and Brit Mark Adamson are previous Fletcher CEOs.
The company has never had a New Zealander lead the Penrose-headquartered business.
Taylor started at Fletcher in November 2017, so he’s now headed it for almost six years.
When he decides he’s had enough, maybe the board will appoint a Kiwi to lead the $3 billion-plus conglomerate.
The share price fell on the back of the result from around $5.50 on Tuesday to $4.93 today.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
