Payout has councillors questioning system

Grady Cameron.
Grady Cameron.
The almost $1 million payout to former Delta chief executive Grady Cameron is set to provide the fuel for what could be a heated Dunedin City Council meeting next week.

The payout to the former head of infrastructure company Delta and lines company Aurora, who was heavily criticised for not maintaining the system, has resulted in mixed, but strong, feelings from councillors.

Mr Cameron chose earlier this year not to seek roles with either company after they were split in two, with separate boards and chief executives. He remains in an interim position until later this year.

In the Delta annual report, released on Thursday, details of Mr Cameron’s earnings for the past financial year showed he took home more than $980,000 from his $560,000 salary, termination and other payments.The report will be discussed at a full council meeting on Tuesday.

Cr David Benson-Pope said yesterday he had asked council staff to prepare a report on a range of options that "might or might not be available to us" for the meeting.

He said he was "pretty surprised and extremely disappointed" at the level of the payment.

He was also keen to know about the conditions of the contract of the new chief executive at Delta, who had replaced Mr Cameron.

"One would want to know whether the conditions were the same, or better, or worse."

If the council was as constrained as it appeared to be — Mayor Dave Cull said yesterday the council could not interfere in the running of the companies it owned —  it raised "major questions" about the management model.

But Cr Mike Lord, chairman of the council’s finance and council-controlled organisations committee, said the company had shown good results in the annual report.

"I think there’s two sides to every story."

He said the payout had been agreed to in Mr Cameron’s contract by the Delta board.It was not his role as a councillor to interfere with that.

"It’s out of my scope in that regard. There’s ways that those figures are reached that just are what they are.

"Whether we like them or whether we don’t like them, that’s the process."

Asked if he sympathised with people who thought the payout was too large, considering the company’s performance, Cr Lord said for those on $30,000 a year, the payment "seems ludicrous".

But for a chief executive, there were others on "significantly higher" wages.

"I’m not defending that; it’s just what it is."

Cr Christine Garey described the payout as "out of sync" with what the community might expect.

"It’s just extraordinary."

She wanted an in-depth discussion about  the council’s ability to influence such matters.

Cr Jim O’Malley said if the companies were rewarding staff on performance, "this doesn’t really line up with that".

"If you have a CEO leaving under a cloud, and then give him a million dollars on the exit, we probably need to consider what gets written in these contracts."

Cr O’Malley said the issue "reflects the powerlessness of the council".

He said legislation governing council companies needed to be reconsidered, and the council had to consider whether the company could be brought back within the council.

"I’d like to get us to understand our legal position on doing that."

Cr Andrew Whiley said the situation was what the council asked for.

It had not been happy with the performance of the organisation and had requested the split of Aurora and Delta that resulted in Mr Cameron stepping aside.

Cr Whiley said nobody would consider the payout as being appropriate.

However, people had a percentage that would be paid in the circumstance of a redundancy.

Cr Rachel Elder said wages for the higher paid were "really out of proportion" to those of the lower paid.

"There just does not seem to be any correlation, and that seems to be across society.

"The gap is getting bigger."

She was also concerned about the issue of performance-based payments, and how they related to actual performance.

An Otago Daily Times online readers’ poll of 467 voters showed 88% believed Mr Cameron should not have got such a high payout.

Mr Cameron did not respond to calls from the ODT yesterday.

Former Delta chief executive Grady Cameron was incorrectly described as Delta chairman in yesterday’s Otago Daily Times.

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