Marryatt heading for showdown on pay rise

18:56, May 31 2013
Tony Marryatt
TONY MARRYATT: The Christchurch City Council chief executive is seeking a pay rise from a loss-making council insurance company.

Christchurch City Council chief executive Tony Marryatt is embroiled in a fresh pay controversy as he seeks a major hike in fees for a loss-making council insurance company.

Civic Assurance, an insurance co-operative owned by 68 local, city, and regional councils, has asked its shareholders to approve a 50 per cent hike in director fees at its coming annual meeting.

This is despite Civic losing $6.5 million in two years and asking councils to stump up $4.2m last year to strengthen its balance sheet after the earthquakes.

The pay-rise move has left one Christchurch city councillor "aghast" and comes as Marryatt is set to front a council committee to explain Civic's troubled position.

As chairman, Marryatt's Civic fees would climb 37 per cent to $44,370 a year, while he earns $7840 as director of a related entity. This is over and above his $538,529 annual salary at the council.

Directors, including Christchurch City Holdings chief executive Bob Lineham, would enjoy a 44 per cent increase to $23,700, while the pay of the audit committee head would more than double.

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Marryatt said that, after directors had no increases in three years, independent advice recommended even larger increases, which the board had trimmed back.

Civic managed $137m in assets, had been given new monitoring responsibilities by the Reserve Bank and was involved in legal battled pursuing reinsurance companies for money.

Even after the increase, the directors would be paid in the "lower quartile" of similar companies, such as state-owned enterprises, Crown entities and council controlled organisations, he said.

While he would be "disappointed" if the measure was voted down, he would not abandon the company.

"In reality, I'd probably prefer not to be the chairman of Civic because I've got enough to do down here in my day job, but I'm not going to walk away from a company that's rebuilding," Marryatt said.

Controversy surrounding his 14 per cent pay rise as council chief executive in 2011 had not altered his belief that all people should be paid at the market rate.

Marryatt's dual role at the council and Civic has already raised questions of a possible conflict of interest, resulting in an investigation by the auditor general in 2012.

This cleared him of wrongdoing but found the council should have identified potential problems earlier.

He is now heading towards a showdown with the councils that own the insurer over pay.

Christchurch city councillor Tim Carter said he was "aghast" at the request for increased fees, but it did not come as a shock.

"I would be very surprised if an increase for the directors of Civic Assurance even could be justified given their performance in the last year." Civic Assurance was a "very small insurance company" and Carter said there were concerns that placements with its reinsurers would "prove woefully insufficient". He also questioned how Marryatt could carry out roles for both Civic Assurance and the city council.

"How . . . [can he] be the chairman of Civic Assurance with a statutory responsibility to minimise their risk, while also being the chief executive of the Christchurch City Council?"

Earlier this month, members of the council's corporate and financial committee voted unanimously to invite Marryatt to their meeting this Friday to explain the Civic situation. "My understanding . . . is that he will appear at the meeting," Carter said. " I'll be very disappointed if he doesn't turn up to answer the committee members' questions."

Christchurch City Council, which owns 12.9 per cent of Civic, would vote on the fee proposal. The mayor and director of corporate services usually decide on those matters.

Christchurch Mayor Bob Parker and council corporate services director Paul Anderson both told The Press last night they were unaware of the proposal and could not comment.

OUR SHARE

Canterbury councils' Civic shares:

Christchurch 1,417,704, 12.9%

Ashburton 56,016, 0.5%

Hurunui 14,000, 0.1%

Waimakariri 88,172, 0.8%

Environment Canterbury 152,696, 1.4%

* Selwyn District Council is not a Civic member.

The Press