Government rejects TVNZ board resignation offers

TVNZ shareholding Ministers Michael Cullen and Steve Maharey have rejected the resignation offers of the three board members who approved a massive salary increase for newsreader Judy Bailey.

A furore erupted over Bailey's pay rise when it was reported earlier this week that TVNZ had agreed to double her salary to $800,000.

Prime Minister Helen Clark said if the reports were true it was evidence of a culture of extravagance at the state-owned broadcaster.

In opposition, Miss Clark and other Labour politicians had attacked TVNZ over the $740,000 salary paid to its previously highest paid employee, Paul Holmes.

Mr Boyce had refused to say how much Bailey was paid.

High pay rates were justified in an intensely competitive television market for the popular frontwoman of TVNZ's flagship news programme, he said.

Mr Maharey made the announcement after a two-and-a-half hour meeting this morning with TVNZ chief executive Ian Fraser and remuneration committee members, Mr Boyce, Dame Ann Hercus and Philip Melchior.

"The three members of the remuneration committee tendered their resignations," Mr Maheray said.

"On balance we have decided not to accept these and have asked the board to ensure changes are made."

The board would immediately review the way it set pay levels for senior staff, and the way such key decisions were passed on to shareholding ministers.

"The shareholding ministers will be writing to the board today setting out our views and the changes that were agreed at today's meeting," Mr Maharey said.

"It is crucial to us that the basis on which senior levels of remuneration are set within TVNZ has a sound, robust and transparent basis."

Mr Boyce became chairman of TVNZ in October 2002 after his predecessor Ross Armstrong was forced to resign.

Dr Armstrong lost his job after offering companies the inside running on government contracts if they joined a think-tank being set up at the request of Miss Clark.

Mr Maharey said that apart from the Bailey issue, TVNZ's board had been performing remarkably well and taking the organisation in the direction the Government wished.

In the past few years it had made good profits, had instituted much of its charter requirements and driven down its overall pay costs.

Therefore, Mr Maharey and Dr Cullen decided to retain the services of the three board members in the belief they would be able to fix the problems identified by the Bailey issue.

- NZPA