It was refreshing to read about our elected Councillors sending a signal to the board of Christchurch City Holdings Ltd (CCHL) about the excessive level of salaries being paid to the CEs of their subsidiary companies.
Let us consider a bit of history. CCHL was formed when councils were required under the neo-liberal reforms to place their trading assets into companies. Most councils had trading companies and many of them sold their assets to honey tongued visitors offering them good prices. Christchurch swam against the tide and formed a holding company CCHL and put all their trading assets under this holding company. I sat on CCHL for 12 years.
CCHL reports to the elected reps on a regular basis and too often their advice is accepted by our elected reps with little in-depth debate. Until now.
Cr Nathaniel Herz Jardine moved that the salaries of the CEs of the trading companies under CCHL be frozen for two years. His motion was supported by these councillors:
Kelly Barber, Pauline Cotter, Celeste Donovan, Tyrone Fields, Tyla Harrison-Hunt, Nathaniel Herz Jardine, Yani Johanson, Jake McLellan and Tim Scandrett.
Those who voted against it were:
Phil Mauger, Victoria Henstock, David Cartwright, Sam MacDonald and Mark Peters.
Cr Coker did not vote because she is CCHL director. Crs Aaron Keown and Andrei Moore were absent.
Cr Nathaniel Herz Jardine said chief executives of Enable, Orion, the airport and port all earned over $850,000 a year and their salaries increased 22% between 2021 and 2023.
With a government-enforced rates cap on the horizon, the council needed to control the rapidly rising salaries of the chief executives working for companies under the council’s umbrella, Herz Jardine said.
“I’m not suggesting they should earn a penny less – I’m just asking that we pause their pay raises and bonuses this year to increase our credibility in the rates cap conversation.”
Is it true that these same companies resisted awarding basic level staff the living wage? The Christchurch Star also had an excellent article on the matter.
An Upton Sinclair quote was “It’s hard to get a man to understand something when his salary depends on him NOT understanding it”.
My prize for the strangest comment at the meeting goes to Victoria Henstock. The Press reported:
Cr Victoria Henstock said the move was “governance overreach” and warned that the council was walking a “dangerous line”.She said as a lawyer, her “legal risk radar was ringing loudly”.
Can I remind Cr Henstock that her role is in directing the actions of CCHL. She, and all Councillors, have the responsibility of agreeing to the Strategic Plan of CCHL each year. The final say on CCHL’s actions rests at the Council table.
Cr Henstock knows this as just in the last term of Council she was in a minority that attempted to put to the people of Christchurch to consider selling some of CCHL’s assets. That was way more significant than encouraging CCHL’s board to freeze CE’s salaries for 2 years, and a way more dangerous decision than what this Council has approved.
I might also observe that what the hell her observations relate to being a lawyer is a strange comment. This was in no way “governance overreach”. If I were at the Council table, I would consider that there are many parts of CCHL calling for attention. Most of the companies are monopolies operating in a regulated environment.
The best example to look at would be City Care. I was a Councillor when it was formed. It was CCC’s attempt to save the jobs of the maintenance staff who worked in an area which we were required to subject to tender. CityCare has spread around NZ and in the Press article it was reported:
City Care has two chief executives, one in charge of the property side of the business Peter Lord, and the other, Tim Gibson, in charge of water side. They earned $587,000 and $567,000 respectively.
When CCC engages City Care to undertake projects it must pay for the cost of the excessively paid CE’s and the company structures (board fees etc) plus a margin for profit.
It would be much cheaper to fold the construction and water services into CCC structures and flog off the City Care operations outside Christchurch. Fletchers have just done this, why can’t CCHL?
To put CCC and CCHL into perspective consider this. The CE of CCC is paid $450k, which is excessive enough in itself. But it’s less than either of the two CEs of City Care. The number of staff CCC’s CE is responsible for is 3100. Last year CCC expended $1.6b.
The number of CCC staff and the expenditure I suspect would easily exceed the staff and expenditure of the entire CCHL portfolio.
So Councillors, a vigorous discussion on CCHL should not stop at CE’s salaries.
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