[Peetwo]

From the Mandarin 25 June 2015...

Federal agency takes on The Australian over executive pay

by

Stephen Easton
25.06.2015


Airservices Australia maintains its reputation is being dragged through the mud and that information about executive remuneration from its annual report is being misrepresented. The stakes are not trivial; a Senate inquiry into the agency’s performance remains ongoing.

Airservices Australia has taken on one of the nation’s most influential newspapers over a series of recent articles suggesting its senior staff received unusually large payrises and bonuses in recent years.

In two letters to The Australian editor Clive Mathieson, the air traffic control agency’s executive general manager of corporate and industry affairs, Mairi Barton, has accused the newspaper of repeatedly making false claims. She says the journalists misread the organisation’s annual report.

Barton maintains it is inaccurate and misleading for The Australian to report the agency’s “salary pool” for executives had grown by more than 40% to nearly $4 million last finan­cial year, and that a “bonus pool” had grown by 60% to almost $800,000.

The claim was first made in a June 15 article, and Barton says Airservices Australia advised the journalist that it was incorrect in the agency’s view, prior to publication. In her first letter she said the average increase to senior executive remuneration was 2.25% in the period in question, between 2012-13 and 2013-14, and added:

“We also advised prior to publication that during the two-year period in question, there were several changes to the composition of the executive and it is not accurate to do a simple dollar comparison from year to year. This includes partial year data for new members of the executive in 2012-13, while the 2013-14 remuneration data includes one-off entitlements such as accrued leave and long service leave paid to a departing long-serving member of staff in 2013-14.”

Barton said the figures were also explained by the fact there were only eight executives included in the 2012-13 data, while the 2013-14 data covered 11 executives. “Other considerations include that the CEO was only employed for part of the 2012-13 year compared to a full year of remuneration in 2013-14,” she adds.

But it seems unlikely The Oz is going to back down at this stage, at least based on comments from corporate accountant John Leece included in the June 15 story, which state the agency did not answer questions “which could have sorted out the inconsistencies” and that the responses it did provide were insufficient to explain how the newspaper’s reading of the annual report was wrong.

After the June 15 letter fell on deaf ears, Barton wrote to Mathieson again last Friday:

“The information that you have relied on from our annual report relates to remuneration data that is presented in accordance with required accounting standards and it is not a salary or bonus pool.
The number of executives included in the reported figures was different between 2012-13 and 2013-14 and it is inaccurate and misleading to make a direct comparison between the two years and imply this is a change to a ‘salary pool’, ‘bonus pool’ or to imply that individual members of the executive have had big salary increases.”

Barton also took issue with two other points in the article published by The Australian last Friday. Firstly there were these two lines:

“Airservices initially claimed the average rise in “remuneration” was 2.25%, but under further questioning yesterday admitted this only covered base salary. With the rise in bonuses, it now claims total average remuneration rose by 5.2%.”

The agency says this assertion is “wrong” because it never made a statement to that effect. At this point, it may be a game of semantics, but, according to Barton’s most recent letter to the editor:

“We maintain that prior to the pay freeze, the executive remuneration increase in 2013-14 was 2.25% on average. Subsequently, Airservices implemented an executive pay freeze for the 2014-15 financial year and for the upcoming 2015-16 financial year. This pay freeze continues the restraint in executive remuneration by Airservices for many years.”

Barton also questions the way The Australian has reported on a case of credit card fraud in the agency that was not reported to police. The June 19 article refers to a now months old and misleading discussion in a Senate Estimates hearing last October, when an Airservices Australia manager thought, from memory, that “$10,000 to $20,000″ could have been stolen — but soon after confirmed the fraud amounted to less than $2500.

The performance of the agency is the subject of a current inquiry by the Senate’s Rural and Regional Affairs and Transport Legislation Committee, which last held a hearing in late November, 2014.

Airservices Australia has asked The Australian to refrain from repeating what it says are variously incorrect, inaccurate and misleading claims, and to publish corrections. One hopes its executive is not collectively holding its breath.

Interesting how in less than 24hrs after this Steve Easton post, The Australian's 'Editor at large' Paul Kelly writes an article on behalf of Angus Houston, see my post - P2: "Angus burger thanks with pickles & Dick's tomato sauce! 

So are the two articles in Friday's The Australian in anyway a retraction or correction??

Nah I don't think so..

MTF...P2

Further confirmation from Ean Higgins (01 July 2015) that the Oz will not be making any retractions or corrections anytime soon...

Airservices boss Angus Houston declines to explain exec bonuses  

• by: EAN HIGGINS
  
• From: The Australian
  
• July 01, 2015 12:00AM
  

Reporter
Sydney

Airservices Australia chairman Angus Houston has declined an opportunity to justify almost $800,000 in bonuses to 11 executives for their performance in 2013-14 as profits halved, key air safety indicators deteriorated and employment of women, indigenous people and the disabled moved backwards.  

The bonuses will be examined by a Senate committee that is also investigating a corporate credit card rort and claims, which have not been denied by Airservices, of some executives being on travel allowances of $90,000.

Senators have questioned how a government-owned monopoly that runs the nation’s air traffic control system with no competitors can justify private sector-style performance bonuses.

The committee will call Sir Angus to appear at hearings in coming months. In an interview published in The Australian last week, Sir Angus said that all pay policies went through the Airservices board and “our policy has been to constrain executive remuneration”.

He said the average rise in executive remuneration last fin­ancial year was 2.25 per cent.

The total value of senior executives’ salaries reported by Airservices rose more than 40 per cent between 2012-13 and 2013-14 as bonuses rose almost 60 per cent to $778,000.

Airservices says the increase in salaries reflected an expansion in the senior executive team from eight to 11 in line with historical staffing levels.

An analysis by Airservices found that, comparing the total ­remunerations of those eight and 11 executives from one year to the next, average performance bonuses rose 14.3 per cent to $70,727, and average total ­remuneration rose 5.2 per cent to $355,454.

However, Airservices said those figures were skewed by shifts in the composition of the executive, and claims its preferred 2.25 per cent figure remains the relevant one.

Airservices says chief executive Margaret Staib, a former RAAF colleague of Sir Angus ­who was appointed in October 2012, received a performance bonus of about $100,000, in a total remun­eration package of $602,000.

Ms Staib said her bonus, for her performance in 2013-14, was “linked to delivery of industry-supported outcomes” including “the successful introduction of ­advanced technology along with new infrastructure and services”.

Airservices’ annual report shows the organisation’s profits fell from $45.5 million in 2012-13 to $21.3m in 2013-14. “The after-tax return on average equity was 3.9 per cent, which was 2.2 per cent below target,” it says.

Expenses rose 11.2 per cent to $994m, with employee costs rising $80m, “due to salary increases and increases in staff numbers”. The increase in staff was “associated with delivering the capital works program and increased delivery of regional services”.

The 2013-14 financial year saw a higher rate of aircraft under air traffic control failing to keep a safe distance apart. The loss of aircraft separation rate under national air traffic control rose from a three- year average of 1.41 per 100,000 flight hours to 1.48 in 2013-14. Loss of separation due to failures of airport control tower operations rose from a three-year average of 0.53 per 100,000 movements to 0.57.

Airservices moved backwards in its stated goal of increasing the number of women in “non-­traditional roles” and participation of indigenous Australians and disabled persons, workplace diversity declining 0.62 per cent compared to a three-year aver­age improvement of 2.2 per cent.

In response to questions from The Australian, Sir Angus did not comment on the bonuses, financial results or the decline in workplace diversity.

On the safety issue, he said: “Outcomes referenced by The Aus­tralian reflect marginal changes that are statistically insignificant. The key performance ­indicator outcomes compare favourably with world’s best-practice and reflect Airservices performance excellence.”

 
MTF..P2