When New Zealand's economy is slowing and businesses are in the doldrums, why is our Finance Minister focusing on boardroom pay packets?
"This Government is committed to raising pay levels for those on low and middle incomes and we, and the public, expect restraint on director remuneration," Grant Robertson wrote to the chairpersons of Air New Zealand, Genesis, Mercury and Meridian. "Given this, I do not support any increase in director remuneration during this term of Parliament."
The heads of all four companies — which are listed on the stock exchange but are 51 per cent Government-owned — fell into line and confirmed they were keeping fees at their present levels.
The most perplexing aspect to Robertson's involvement is that he has expressed no issue with how any of the quartet are performing. Meridian, in particular, notched up a record net profit of $339 million in the year to June.
Will its chairperson and board be incentivised to maintain that momentum with no prospect of remuneration rises until at least 2021?
It would appear there has been no great groundswell among the voting public calling for director fees to be reined in — severance payments or expenses, perhaps. There are some shareholders who angst at the idea of fee pools being hiked but recent rises at the four partially privatised companies are hardly extreme.
Between 2017 — before Robertson took office — and this year, Meridian's board pay rise of 10 per cent (from $100,000 to $110,000 per annum) is the only fee bump to write home about.
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The other increases were far more modest. Genesis' board fees went up from $86,600 to $90,000 over the period. At Air NZ, director pay packets went up $5000 to $100,000, while Genesis lifted annual fees from $96,000 to $98,000.
All of this comes as business confidence is continuing to tumble. On Monday, just hours after the Herald revealed Robertson's handbrake on board pay, ANZ said a net 54 per cent of respondents in its monthly confidence survey expect general business conditions to deteriorate in the year ahead. That's the lowest level since April 2008.
Robertson's stock response to the issue has long been to say that perception doesn't equal reality. He argues New Zealand's economic fundamentals remain sound and, while growth is slowing, this country is still in a good position compared with many in the global context.
There is some truth to this, but Robertson does himself no favours by dipping into how the likes of Genesis, Mercury, Air New Zealand and Meridian set board pay.
Business confidence might only be a perception but it also means firms pull back on investing and hiring when they foresee gloom on the horizon.
That is a real issue and will keep hurting economic growth if it continues.
And it's where Robertson should be focused, rather than fixing board pay problems which hardly needed repair.