Auckland mayor Phil Goff angry at big payout to former port CEO Tony Gibson

Auckland Mayor Phil Goff has slammed a nearly $1 million payout by poorly performingPorts of Auckland to former chief executive Tony Gibson.

Goff said the port’s council owner was “neither consulted nor advised of the board’s decision to make this payment”.

“While the board has the authority to do this, it is not a decision either agreed to or supported by council.

“To the contrary, I do not support the decision, nor do I believe other councillors would endorse it.”

The payment of between $1.78m-$1.79m to under-pressure Gibson who left on June 30 is revealed in the port’s 2021 annual report, published today along with more disappointing revenue, underlying profit and dividend news for Auckland ratepayer shareholders.

There was no explanation for the reported $1.7m payment, other than noting the recipient had resigned and it was a “current and terminated” amount, but Gibson’s pay in the 2020 financial year was $820,000.

Gibson, who had headed the country’s main imports gateway for 10 years, announced his resignation in May, citing “a very public challenge with the spotlight on me [which] has been damaging the reputation of our port and our people”.

Apart from its continuing disappointing financial performance and productivity, the port had been in the spotlight over its health and safety record and three fatalities linked to the port. They led to the council commissioning an independent health and safety report.

The report found serious systemic problems in relation to critical health and safety risk management and called for significant improvement.

The port has also been in the headlines for its continuing failure to fully implement a container automation project started five years ago, along with lengthy ship handlingdelays and container terminal productivity issues when global shipping congestion struck after the pandemic breakout.

The 2021 annual report showed 333 staff on pay of more than $100,000 – five more than in 2020.

Interim chief executive Wayne Thompson told the Herald he was not applying for Gibson’s job.

He had been with the port 17 years and was in his early 60s, he said.

He believed the company hoped to announce Gibson’s successor before the end of the year.

Goff said the FY2021 financial results were “disappointing but not unexpected”.

While the port reported net profit for the year to June 30 increased $22.6m to $45.6m, this included a $27.6m revaluation of investment property in the Auckland and Waikato real estate value boom.

Underlying profit for the year fell to $20.7m from $30m in FY2020, attributed to the impact of Covid response, the absence of cruise ships and capacity challenges through the container terminal.

Revenue fell to $226.3m from $231.4m the previous year.

The port will pay the council a dividend of $3.72m. Returns to the council have been dwindling as the port undertook a $500m-plus capital expenditure programme, including the vexed automation project.

While the 2021 dividend was within guidance given to, and accepted by, the council, Goff’s office today made it clear an improvement in performance generally was expected.

“While Auckland Council acknowledges the external pressures facing [the port] remain significant, as sole shareholder, council expects the port company to complete automation and start to build back its financial position as quickly as possible, alongside the full suite of recommendations contained in the independent health and safety report, which is progressing well.”

The port’s chair Bill Osborne, who took over the job in January after chair Liz Coutts stepped aside, will leave the board later this month.

The council has been driving change on the board, and several new directors have been appointed in the past 18 months.

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