Auckland council-controlled organisations pay $1m in bonuses to senior executives

Auckland Mayor Phil Goff wants to stamp out bonuses at Auckland Council. Photo / Sylvie Whinray

Senior executives at four of Auckland's council-controlled organisations were paid $1.1 million in bonuses last year - and Auckland Mayor Phil Goff wants to stamp out the practice.

Goff is getting lawyered up to stop the unelected directors of CCOs dishing out bonuses following news Panuku chief executive Roger MacDonald received an $82,500 pay rise last year, most of that by way of a bonus.

The Herald can also reveal 38 Panuku staff were paid bonuses totalling $451,156 at an average of $11,872 each in the past year. Of Watercare's 940 staff, 20 were paid bonuses totalling $543,000 at an average of $27,150 each.

The salary of Watercare chief executive Raveen Jaduram rose $50,000 last year to about $775,000, most of that by way of a bonus.

At Auckland Tourism, Events and Economic Development(Ateed), five executives were paid $121,682 in bonuses in the last year, an average of $24,336 each.

Regional Facilities Auckland chief executive Chris Brooks is not paid a bonus, but one executive receives a bonus based on an old employment contract.

Last year, the executive was paid a bonus of $15,000 for exceeding a target of $15.3 million gross commercial revenue for the CCO.

The Auckland Council and Auckland Transport - the two largest council bodies - do not pay bonuses.

In a statement, Goff said he was not in favour of performance-recognition pay.

"I've asked staff to look at how that can be stopped and to provide legal advice on that, and I intend it to be part of the CCO review."

An independent review of the five CCOs is a top priority for Goff in his second term. He shares public concerns about whether the CCOs listen to communities and can be held accountable.

Panuku chief executive Roger MacDonald.

Panuku board chairwoman Adrienne Young-Cooper said in 2017 the executive team established a performance-based reward framework that was approved by the board.

She said performance-based recognition payments are standard industry practice for senior executive roles like those at Panuku. The board reviewed the scheme in June this year and agreed to maintain it for another year to remain competitive with the market, she said.

Young-Cooper said that in September last year MacDonald received a 2 per cent salary increase and a bonus for the previous year totalling $82,500. The bonus payments to 38 staff reported in the 2018-19 report were for the previous financial year, she said.

Young-Cooper said the board was still considering MacDonald's salary and bonus for the 2018-19 year.

Watercare chairwoman Margaret Devlin said key performance indicators (KPIs) are put in place to shift the dial in the organisation and were not about giving someone a bonus for just doing their job.

"The key to all of this, irrespective of what system you use - is it clear what the measures are, is it transparent what the expectations are and are people being held to account for the delivery against those targets," she said.

Watercare chair Margaret Devlin. Photo / Supplied

Devlin said she would work with Goff about the most appropriate remuneration strategy for the organisation in the marketplace.

Ateed chairman Mark Franklin said Ateed incentivises the performance of its senior executives through their employment contracts – a process which has a target of awarding 15 per cent of each senior executive's remuneration via clear and mutually agreed performance measures.

He said following an annual staff performance-assessment process, the year's proposed executive incentive payments go to the board for approval before subsequently being paid or not.

Meanwhile, Goff has hinted at the possibility of introducing a new targeted rate for climate change.

In a video interview with the Herald's Simon Wilson, the mayor said he had no plans for any new targeted rates this term, but added changing circumstances might mean they had to be considered.

"Somewhere we will have to work out what we are going to do on climate change and what the cost will be and how we fund it," said Goff, saying any change would require working with the community and developing a consensus on how it should be done.