Mayor orders 'culture change' after fresh salary hikes revealed.

Auckland Council's salary scandal has widened with fresh revelations executive pay at one council body blew out by 89 per cent in two years when wage inflation is running below 2 per cent a year.

Auckland Tourism, Events and Economic Development (Ateed) has defended the increase in executive salaries from $1.096m to $2.07m between the 2015 and 2017 financial years.

An Ateed spokesman said two new general manager roles largely account for the increase in salaries between 2015 and 2017. Another reason was "staff at Ateed moving through salary bands over time".

Like Auckland's ratepayers, I do not accept the increase in the number of high level salaries


"Like the rest of the council group, Ateed competes with the private sector for senior management and specialist roles and salary bands are benchmarked against best practice and reviewed against market data," the spokesman said.

The Ateed figures follow revelations that one in five council staff earn more than $100,000, a 25 per cent increase to 194 staff now being paid more than $200,000 and chief executive Stephen Town signing off a $405,000 severance payment to a top executive in the past year.

The salary revelations are becoming a huge issue for Mayor Phil Goff, who vowed to cut fat at council when elected a year ago.

Last night, Goff declined to comment on the 89 per cent executive pay rise at Ateed and framed his concerns in general terms.

"Council has to pay competitively to attract good people, but like Auckland ratepayers, I do not accept the increase in the number of high level salaries," Goff said.

The mayor's frustration was spelled out in a letter to Town on Thursday where he called for a culture change "based on value for money underlying everything we do" and immediate answers on salaries above $200,000.

"Council needs to demonstrate clearly and transparently that the process of determining and setting salary levels are appropriate, realistic and not excessive," the letter said.

Goff's office has also released a second letter sent to Ateed board chairman David McConnell asking new chief executive Nick Hill to lead a 'first principles' review of Ateed's roles and functions.

The letter, dated August 22, suggests Ateed is doubling up on the work of Government bodies like Tourism New Zealand and Trade and Enterprise and needs to focus more on economic development in "less prosperous communities".

Goff told the Weekend Herald that Ateed does some great things, like running the World Masters Games and promoting Auckland as a venue for movies, but he could not predetermine the outcome of the review that will feed into the new 10-year budget.

A Weekend Herald survey of executive pay at Auckland Council and its six council-controlled organisations(CCOs) found three CCOs have cut costs.

Watercare led the way with a 20 per cent drop, from $4.4m to $3.5m, by reducing the number of executives and costs. Regional Facilities Auckland's cost have fallen by 17 per cent by cutting executive roles from 22 to 17, and Auckland Council Investments Ltd reported a 7.5 per cent drop by chipping away at costs.

Auckland Council executive costs rose by 25 per cent, partly driven by a $405,739 "termination benefit" to a member of his executive in the past year. Town has declined to say if the $405,739 termination benefit was for the same executive paid a $405,739 severance payment.

Auckland Transport executive costs have risen 21.5 per cent, also driven by more salaries above $200,000.

Executive costs at Panuku Development Auckland cannot be measured because the CCO only came into being in September 2015 and has not been running for two full financial years.

Senior management costs

Auckland Council

2015: $3.57m

2016: $3.82m

2017: $4.46m

Increase over two years: 25%

Auckland Transport
2015: $3.62m
2016: $4.29m
2017: $4.4m
Increase over two years: 21.5%

2015: $4.4m
2016: $3.7m
Decrease over two years: 20%

Auckland Tourism, Events & Economic Development(Ateed)
2015: $1.096m
2016: $1.43m
2017: $2.07m
Increase over two years: 89%

Regional Facilities Auckland
2015: $2.54m
2016: $2.76m
2017: $2.11m
Decrease over two years: 17%

Panuku Development Auckland*
2016: $2.31m(10 months of operation)
2017: $2.79m

Auckland Council Investments Ltd**
2015: $3.6m
2016: $3.72m
2017: $3.33m
Decrease over two years: 7.5%
*Panuku has not been running for two full financial years to make a comparison
**Includes Ports of Auckland executive staff