ACTEW Chairman John Mackay faces Legislative Assembly investigation on April 3.

ACTEW Chairman John Mackay faces Legislative Assembly investigation on April 3. Photo: Jay Cronan

ACTEW chairman John Mackay says he resigned from Canberra’s water utility because of the “frenzy” over the under-reporting of Mark Sullivan’s salary.

But Mr Mackay said on Monday that he was not pushed by the corporation or the ACT Government to step down.

“I jumped,” Mr Mackay told ABC radio.

“I made the decision myself.

“I put that to the Chief Minister that I had made that decision, it wasn’t something I intended to discuss with her or anybody else, the same with my board colleagues.”

Chief Minister Katy Gallagher has backed up his claim, telling Fairfax Media on Monday that he was not pushing into resigning, but that she did not try to convince him to stay in the position when he approached her on Friday.

Mr Mackay, whose resignation takes effect on June 30, said he had considered stepping down during the three weeks since it was revealed ACTEW had under-reported its managing director’s salary by $234,000 in its 2010-11 annual report.

The chairman said the flurry of front pages and radio and TV reports that followed had been “pretty rough” and he hoped that his resignation would bring an end to the “frenzy”.

“Obviously there were some pros in doing it [resigning],” he said.

“The main one of those is I think it may just help to stop the frenzy that’s gone on for the last three weeks.

“I looked at the decision and thought I’ve had 15 of the best years of my life in this show, there is now a frenzy on and there’s some concerns of the shareholders, maybe now’s the time to go before it gets worse and starts to damage my reputation, the corporation, other people’s reputation.”

Mr Mackay said the controversy over Mr Sullivan’s salary had “absolutely” led to his decision, but he also noted the disquiet the shareholders had expressed in December over Actew’s corporate sponsorships.

“So they were a bit uncomfortable about a few things, but just to be clear, I don’t think the salary scandal, so to speak, was a sackable offence or a resignable offence on its own,” he said. 

Ms Gallagher said on Monday afternoon that she believed "generational change" and "fresh eyes" were needed at the water corporation.

She also indicated that ACTEW would renegotiate the controversial $855,000 salary of managing director Mark Sullivan, put an end to  bonuses for executives at the corporation and make it subject to a full "structural review". She had also asked the board to consult the Remuneration Tribunal before setting executive pay at the utility.

Ms Gallagher said she had no doubt the controversy over the under-reporting of Mr Sullivan's wages had played a part in Mr Mackay's decision to quit.

"John came to me on Friday and indicated that he would like to step down as chair," she said.

"We discussed matters of recent past and I have no doubt that contributed to his decision.

"I didn't try to persuade him not to and indeed we spoke of the need for generational change and for fresh eyes to come into ACTEW.

"It's a very important appointment in the community and John has been there a long time and he has been a significant contributor as well."

Mr Mackay's resignation as chairman of ACTEW and its half-owned gas and electricity utilities ActewAGL is effective as of June 30.

The ACTEW board met Ms Gallagher and Mr Barr to discuss the controversy that has engulfed the water corporation during the past several weeks after the government announced that the salary of managing director Mark Sullivan was under-reported by $234,000 in annual reports and correspondence.

Ms Gallagher and Mr Barr are the two shareholders of the Territory Owned Corporation and the Chief Minister said in the wake of the revelation of the under-reporting of the salary that she was "furious" at being misled.

Mr Mackay had said on several occasions that there was no need for him to resign over what the corporation called a spreadsheet error and an honest mistake.