ACTEW bosses face Legislative Assembly committee hearing
ACTEW managing director Mark Sullivan faces Legislative Assembly investigation. 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.