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Treasurer accepts ACTEW pay 'error'

ACTEW managing director Mark Sullivan faces Legislative Assembly investigation. Click for more photos

ACTEW bosses face Legislative Assembly committee hearing

ACTEW management face a Legislative Assembly committee hearing to answer questions about its annual report, including the under-reporting of its managing director's pay. Photo: Jay Cronan

ACTEW says its managing director's $855,000 pay packet puts him in the bottom 25 per cent of executives doing comparable work.

But the territory-owned corporation will not supply information on what it considers to be similar work, or which executives the remuneration of Mark Sullivan was measured against.

ACT Treasurer Andrew Barr told a Legislative Assembly committee hearing that he accepts that the under-reporting of Mr Sullivan's salary was an "error".

ACTEW chairman John Mackay told a standing committee on public accounts hearing on Thursday that benchmarking by an independent remuneration consultant found Mr Sullivan was earning less than 75 per cent of executives doing similar work.

Mr Sullivan's salary, the highest of any water executive in Australia, was the subject of scrutiny as the Assembly seeks to resolve the contentious issue of how the $855,000 figure was under-reported.

It was revealed two weeks ago that ACTEW had under-reported Mr Sullivan's salary by $234,000 in an annual report and a letter to shareholders in 2011, which both stated his remuneration package was $621,171.

Chief Minister Katy Gallagher has criticised the under-reporting and questioned whether the $855,000 pay packet is appropriate. Mr Mackay told Thursday's hearing that ACTEW had taken advice from remuneration consultants Egan Associates on what to pay its senior managers.

The chairman said Egan Associates had written three reports for ACTEW over the past five years.

"Mr Sullivan's salary and bonuses - there's two elements to it - is currently, according to that remuneration consultant, in the lower quartile, in the lower 25 per cent," Mr Mackay said. "So for every 100 executives doing what Mark is doing, 75 are earning more than him."

But ACTEW refused a request by The Canberra Times to view the benchmarking it had used because the information was commercial in confidence and the organisation was still responding to questions on the subject from the government.

The organisation also said it would not provide examples of what types of executives were considered to be doing the same level of work as its managing director.

At Thursday's hearing, the opposition questioned Mr Barr on the role he and Ms Gallagher, as shareholders, had played in setting the salaries of ACTEW directors.

The Treasurer told the committee that the government only determined remuneration for non-

executive directors and did not have a hand in setting Mr Sullivan's pay.

Mr Mackay said the managing director's pay packet was determined by ACTEW's board.

The Canberra Liberals also pressured the Treasurer on the time lag between ACTEW's discovery of the under-reporting in October last year and when he and the Chief Minister became aware of it.

"I think the Christmas period intervened and I've said on the public record more than once that I've expressed my disappointment that the time period from when officials in government knew … and when I became aware of it is unacceptable," Mr Barr said.

But the Treasurer said he accepted ACTEW's explanation that the $234,000 that was missing from the 2010-11 report was an "honest mistake".

"I don't, as I've expressed on a number of occasions, believe in the conspiracies theories that have been bandied about in relation to this," he said.

"I fully and 100 per cent accept it was an error. But what compounded the error was the length of time before I became aware of it or the Chief Minister became aware of it."

Mr Sullivan also told Thursday's hearing that PricewaterhouseCoopers was the firm conducting a review of ACTEW's governance, including spending on sponsorships and corporate hospitality.

But he criticised a Canberra Times report that quoted the Chief Minister describing the expenditure as "corporate largesse".

Mr Sullivan said the review would be finalised in about a month, but some of its conclusions would be known in two weeks.

Mr Mackay said ACTEW's expenditure was "reasonable".

"I sign all of Mark's personal expenditure off on a regular basis, so I'm able to say without question that the sponsorships, according to the board, are reasonable and that Mark's personal expenditure is reasonable," he said.

24 comments so far

  • Oh jee an extra $250K in my bank? how did that get there? oh well ill let it slide surely someone knows about it...

    Date and time
    April 04, 2013, 2:54PM
    • We criticise reporters for false reporting - same should hold for false comments. At no time has Mr Sullivan denied the 'extra $250K' was being paid to him - that was part of his remuneration package, and should appear in his account. What at issue here has been the non-reporting of his full remuneration package in the annual report.
      Also the politicians weighed in with inuendo before they had checked whether the total package was or was not appropriate.

      Date and time
      April 04, 2013, 3:32PM
  • The problem is that when politicians weigh into debate to claim dishonesty on the part of the government (and coincidentally their political opponents), no-one wants to further investigate the case. Even if the 'discrepancy' was intentionally misreprested by some self-interested person in ACTEW, they can be sure that all the heirarchy will duck for cover and are happy to quiet the storm of criticism if the matter is discovered.

    Date and time
    April 04, 2013, 3:03PM
    • Reeks of a boys club... look after each other and stuff the public... just like the Raiders board.... hang on.. its the same people!!!

      Water Rat
      Cotter Dam
      Date and time
      April 04, 2013, 3:25PM
      • Boys club! Who was CEO before Sullivan? Does the name Costello ring a bell. Before Costello we had McKay. Looks like it is "whose turn on the big bucks this time". Just a little job swap within the ACTEW / ActewAGL family and we can all have a turn with our snouts in the trough.

        Date and time
        April 04, 2013, 6:54PM
    • Hold on, there seems to be conflicting information in this report. If Mark Sullivan is the highest paid water executive in Australia, how can any other executive be doing similar work? surely they just mean other senior executives in absolutely any other industry all over the country, which is a bit useless, really. The logic is, 'Well dang it, they've all got yachts, so I should have one too! (stomps foot).

      I wasn't there and there isn't detailed reporting so it's hard to be sure, but I can't believe Mr Barr let this one slide, "So for every 100 executives doing what Mark is doing, 75 are earning more than him." - At a guess, how many water executives do you think there are in Australia, eh? Hmm? Maybe thirty, forty? Let's be generous and call it sixty. But hold on, there could be ten thousand of them, Mark Sullivan is still the highest paid of them all, and in the smallest of all states/territories of them all too. There's no dressing up that fact.

      Andrew Barr, you happy little puppy dog! Roll over! Fetch!

      Date and time
      April 04, 2013, 4:06PM
      • You seem to be the only one who has pointed out this glaring contradiction, where he is the highest paid in the industry for the role, in the smallest juristiction, yet is in the bottom 25%. Huh? And exactly what is it that this fellow does that is worth nearly a million dolars a year? Anyone?

        All I see are large snouts covering each others troughs. I am disgusted.

        Date and time
        April 05, 2013, 11:19AM
    • What a predictable pantomime. It's always the same pattern. The Government, with inside knowledge that the story's going to break, gets on the front foot to implant the idea in the public's mind that they care about public finances and assuage all us good citizens of what good guys they (the Government) really are, while good cop #2 in the Government in stereo says "Oh, he's in the bottom 10% - he's very hard done by didn't you know?" It's just a clever variation of the classic "Good cop, Bad cop" routine. Pathetic. They should all be sacked forthwith for lying and incompetence.

      Date and time
      April 04, 2013, 4:12PM
      • What utter rubbish. Mates looking after mates. What a pack of arrogant, egotistical bullies. And the thought of them likely slapping achother on the back, lighting cigarettes with rolled $50 notes, sipping Walker Blue and laughing about the naivety of the ACT Treasurer, is galling. It's Orwell's "Animal Farm" all over.

        Hilary Us
        Date and time
        April 04, 2013, 4:12PM
        • I love the way these overpaid executives justify their salaries by comparing their package to some other overpaid executive's salary. Where is the value for work performed? Where is the value to stakeholder? Where is the value to clients? This is how we have departmental heads being paid more than the minister and indeed the prime minister - what a rip off!!!

          Date and time
          April 04, 2013, 4:27PM

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