Orion CEO Remuneration
23 July 2014
Orion CEO Remuneration
Christchurch is a challenging and complex place to live and work as the city is rebuilt post-earthquake. From a business and community perspective, it is not 'business as usual' for anyone.
In August 2011, the Board of Orion secured agreement from Rob Jamieson, a highly regarded executive and very experienced electrical engineer, to take the role of Chief Executive Officer of Orion to lead the organisation through the first phase of recovery and rebuild.
This appointment followed the departure of the previous CEO, Roger Sutton, to head the Canterbury Earthquake Recovery Authority. The appointment was at a time when Orion was still in an emergency recovery mode following the extensive damage caused to the local electricity network as a result of the February and June 2011 earthquakes.
When appointed at that time, the remuneration package was agreed to include a one-off at-risk deferred component. The at-risk component was equivalent to around 15% of base salary over a three year period and was only payable if the CEO achieved satisfactory performance in the three years to August 2014.
Mr Jamieson has more than met those performance requirements by professionally and skilfully managing Orion's recovery from the earthquakes, and its significant rebuild investment, in very trying conditions over the last three years.
Given the performance of Mr Jamieson, the Orion board unanimously agreed to pay the deferred at-risk component agreed at the time of Mr Jamieson's appointment. Half of the payment was made in the 2014 financial year with the remaining 50% made in the current 2015 financial year. The 30% increase in annual salary reported in some media is incorrect as the 2014 figure in the annual report includes a payment deferred for performance over the last three years. As the Board spokesperson, I apologise if earlier communications caused this confusion.
Including the annualised cost of the at-risk deferred component, Mr Jamieson's remuneration is below the market median for his position equivalent during the last three years.
Orion is a lifelines company vital to the Canterbury economy. It is managing a large earthquake rebuild, needing to invest over $300m over the next five years in physical assets, and the number of new residential and business connections continues to increase as the rebuild gathers pace.
The number of contractors working near our network also continues to rise, and is now around ten times pre-quake levels.
It is absolutely critical that Orion has strong leadership and management and that the company has a CEO that is a high performer with technical expertise that can also offer stability to the company and stakeholders.
Orion owns and operates the electricity distribution network that provides power to central Canterbury. As one of the largest electricity distribution networks in New Zealand, we cover remote rural areas, regional towns and the city of Christchurch. Our goal is the provision of a safe, resilient, reliable and cost effective electricity distribution network.
Our network extends over 8,000 square kilometres from the Waimakariri River in the north to the Rakaia River in the south and from the Canterbury coast to Arthur's Pass. We transport electricity to more than 190,000 homes and businesses.
Orion is a community owned entity with two shareholders - the Christchurch City Council owns 89.3% through its subsidiary Christchurch City Holdings Ltd, and the Selwyn District Council owns 10.7%. We aim to create value for our shareholders and contribute to the economic success of our region.
Orion bills electricity retailers for the network delivery service and electricity retailers then on-charge homes and businesses.