Board gets telling-off for Bailey pay fiasco

The Government stopped short of sacking the TVNZ board over its controversial decision to double newsreader Judy Bailey's salary, instead opting for a stern dressing-down and a warning to never again breach the "no surprise" principle.

TVNZ's remuneration committee - chairman Craig Boyce, Dame Ann Hercus and Philip Melchior - met with shareholding ministers Steve Maharey and Michael Cullen yesterday in response to the outcry about Bailey's $800,000 salary.

During the 2 1/2-hour crisis meeting the three directors offered their resignation, but the ministers would not accept them.

It is thought that if the ministers had sacked Mr Boyce, other members of the board would have resigned.

Mr Maharey said the directors would stay on to ensure changes were made.

"Dr Cullen's and my opinion is that overall this board has been working very well," said Mr Maharey. "They had a record surplus last year. It is delivering a lot of charter [programmes]. They are working hard on trying to get this organisation going forward."

The Government's stance has been attacked by opposition MPs as a charade which insulted the intelligence of New Zealanders.

The TVNZ board has been sent a stern letter directing it to ensure the Government is not surprised in the future by embarrassing public revelations and that an immediate review of remuneration at TVNZ is undertaken.

Mr Maharey confirmed speculation there had been disagreement within the board over Bailey's pay.

He said he learned about the rise last week when Dame Ann, a former Labour Cabinet Minister, rang him to resign.

"She did that because she did not agree with the decision she felt she had not taken part in, and so she did not want to continue on the board."

Mr Maharey asked her to wait while he tried to resolve the situation.

Yesterday, Dame Ann again tendered her resignation, but after it was declined, agreed to stay on the board.

Mr Boyce said Dame Ann was entitled to take the stance she did and there would be no problem working with her.

However, National MP Murray McCully said Dame Ann's position on the board was untenable as other directors could not have any confidence or trust in her.

The differences between Mr Boyce and Mr Maharey were on stark display at a media conference yesterday. Mr Maharey chastised the chairman and his board for the decision to grant the pay rise, saying he questioned their judgment on it.

On one occasion Mr Boyce was asked if he was politically naive, to which he answered "perhaps", only to have Mr Maharey interject to say, yes, he was.

Mr Maharey made it clear he did not accept the board's reasons for agreeing to the pay rise, labelling it a "fundamental disagreement".

"We don't have confidence in this decision at all," said Mr Maharey, "which is why we are demanding they fix it."

When asked if he had confidence in the board members, Mr Maharey avoided the question, saying only that he was confident they could put things right.

Mr Boyce said he and the board had not expected the degree of public outrage there was about the pay rise.

Mr Boyce said the board had been told by management that there was danger Bailey would be poached by a rival station.

"I believed we were in serious danger of losing her. That's not a matter I'm prepared to talk about, but I certainly believe that we were in danger of not having her going into next year and that we believe she is vital for our product."

Act leader Rodney Hide criticised the Government's response.

"The Prime Minister's do-nothing response has solved nothing. A major problem remains given we've got a board member who's leaking to the Government.

"What's more, it's now known that the Government's shock and surprise was all carefully orchestrated because pay details were leaked to them a week before they became public."

Mr McCully said the offering of resignations was a "predictable sham".