Headline v story

November 24th, 2012 at 7:02 am by David Farrar

The headline in Stuff:

High pay rates stay despite firm’s loss

Note the journalists doesn’t write the headline. Then the first para:

State-owned coal miner has more than a quarter of its staff earning double the average wage and a chief on $1.1m when the company made a loss of $40 million this year.

Solid Energy’s 2012 annual report shows it chief executive Don Elder was paid $1.1m in the year to June and weeks later announced he was axing the jobs of a quarter of the staff to save millions of dollars in costs.

So at first the impression is that despite Solid Energy losing money, the CE is unaffected or even getting a pay increase. But you then read:

Elder’s 2012 pay is $250,000 less than what he was paid the year before because he received less in performance payments.

Hmmn, so in fact the CE has taken a 20% cut in remuneration – not such a sexy headline though is it.

The board was prepared to pay him a short term performance payment of $164,350. That was only 40 per cent of what he could have earned in that category.

However Elder declined to take anything in that short term category.

And the CE voluntarily declined any short-term performance payment even though he met some of his objectives. A laudable decision, in light of the company’s struggles.

Elder told the board he wants to take a 10 per cent cut to his base pay in this 2013 financial year.

And he has voluntarily offered a cut in his base pay rate.

It’s good all this detail is in the story. It is just a pity that the headline didn’t reflect it with a more accurate headline such as “Solid Energy boss takes pay cut as company struggles”

Tags: ,

13 Responses to “Headline v story”

  1. m@tt (636 comments) says:

    So the CEO of a struggling company has his salary reduced from from 1.3 to 1.1 million while quarter of the employees have their pay cut to zero.
    Presumably the employees were doing a good job, they were made redundant, not fired. Meanwhile the CEO, who’s job it is to run a profitable company lost 40 million dollars.
    Nothing laudable about that at all, in fact I’d say Don Elder is a complete failure and should resign.

    [DPF: I suspect the closest Matt has come to business, is his after school job at McDonalds.

    Maybe Matt could share with us how Elder is responsible for a collapse in the global price of coal.

    This may require a knowledge of how a market works, so I am not expecting a response]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. flipper (4,330 comments) says:

    Well spiotted DPOF.,

    But sadly, it is typical of on line journalism from APN and Fairfax. A look at the Herald site this morning simply emphasises the point. It is the rubbish that gets highlighted *(like the cointinuing “employment” by Dottiecom of Fisher as his PR mouthpiece) and the serious stuff that gets shunted. The Fairfax site, on this occasion, is a little better. Overall, both sites are rubbish.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. Mark (1,502 comments) says:

    farcical journalism although on the sad side of this NZ has a terrible track record especially with listed companies of paying overblown salaries for appalling share price performance. Telecom is one that always springs to mind but there are others.

    I am a great believer in rewarding great performance with great salaries but that is a bit of a foreign concept in the NZ corporate sector

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. duggledog (1,621 comments) says:

    And then we read of the Salvation Army Major General wanting to give the middle class a good hard squeeze, with Simon Collins who wrote the article simplistically stating the ‘top tax rate for the rich’ 33%. Rich. What a child’s word. I am sick of hearing / reading this shit. ‘High pay rates stay despite firm’s loss’, for god’s sake. The guy has talent and would have probably spent 40 years getting to where he is now. Envy journalism designed to create an envy vote for you know who.

    Kiwis are often poor because they’ve made appalling decisions. From having too many kids right through to getting a second mortgage on their house and losing it all trying to win at the rich man’s T.A.B, the share market.

    There are literally hundreds of millions of people around the world who would give anything for a chance at living below the poverty line in NZ including my new mate from Rwanda. He laughs his ass off at this bullshit

    Never donating to the Sallies again

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. Paulus (2,707 comments) says:

    Read the PR exercise on Dotcon this morning in Herald.
    Did not understand a word of what article was trying to achieve – read again – still no change.
    Herald must have needed to fill the paper somehow.
    What will Herald and Fairfax do when Dotcon is extradited, because this PR exercise is obviously part of it.
    Dotcon does not realise that this kind of PR exercise will do nothing to affect what is a simple extradition hearing in New Zealand.
    He continues to lose credibility by crapping in his own nest, and those around him, by bringing in any sort of extranious mud in the hope that some will stick to the Government and John Key.
    In other countries his kind of money and unfluence counts for a great deal , but not here.
    We chop tall (and very fat) poppies – Dotcon is helping nobody – certainly not himself.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. wat dabney (3,840 comments) says:

    m@tt,

    It is completely irrelevent if the sacked employees were doing a good job or not. I’m sure the employees of that last buggy-whip manufacturer were doing a good job.

    Neither you nor I can have any idea whether the CEO is doing a good job or a bad job. The fact that the ‘company’ lost 40 million dollars doesn’t give us any clue either.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. mikenmild (12,346 comments) says:

    Holy cow, Stuff and the damn MSM are reading more and more each day like…well, like this blog really – headlines unsubstantiated by information. So, as we all find new ways of informing ourselves, who is providing the best service?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. Luc Hansen (4,573 comments) says:

    Maybe Matt could share with us how Elder is responsible for a collapse in the global price of coal.

    1. The downward trend had been evident for quite a while as reflected in the commodity price index. Elder failed to react in a timely manner to the new reality. Some job losses were inevitable, but Elder wasted valuable time until he was forced into slash and burn panic.

    2. How much has the man wasted on his southern lignite fantasy?

    3. Funny, I have always thought the buck stops somewhere. I guess not, these days, if the new paradigm of ‘taking responsibility’ is to kick the can down the road!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. YesWeDid (1,056 comments) says:

    [DPF: I suspect the closest Matt has come to business, is his after school job at McDonalds.
    Maybe Matt could share with us how Elder is responsible for a collapse in the global price of coal.
    This may require a knowledge of how a market works, so I am not expecting a response]

    As someone running a company that has been directly affected by the Solid Energy closure of Spring Creek might I suggest DPF, that you do a bit more investigation into how and why Solid Energy have made such a mess of things ( hint it’s a lot more than just a drop in the price of coal). There have been some very poor decisions made by the Solid Energy board and by Don Elder, some very poor investments made, large increases in staff numbers based on a blind belief that the price of coal will just keep going up and up and large debts even though the company had record earnings.

    There needs to be more accountability at the top level in Solid Energy and that includes Don Elder stepping aside.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. wreck1080 (3,999 comments) says:

    But give me a break.

    Executive pays are now huge, despite many company stock prices at mid-90’s levels.

    It simply proves that in many cases that long term pay increases are not linked to performance.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. gazzmaniac (2,306 comments) says:

    Solid Energy has more than a quarter of its staff earning double the average wage

    And they still pay significantly less than equivalent jobs across the Tasman.

    Has nobody taken into account the fact that Elder took SENZ from being almost in receivership to record profits? He’s not as bad as everyone has made out.

    YesWeDid – Spring Creek never made a profit. It was being propped up by profits of other mines. It had to go at some point, ditto with the lignite project.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. BigFish (132 comments) says:

    I don’t see the relevance of the article stating the proportion of staff earning double the average wage. Same could be said about many companies in industries where salaries are higher than average.
    It’s an argument or point that doesn’t go anywhere.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. scanner (340 comments) says:

    What about the general manager of Stockton mine telling the wages staff he wouldn’t be taking a pay cut, just after telling them the changes he was making to cut their pay by 17%.
    Elder has presided over a “culture of excess” that has seen salaries increased from the sublime to the ridiculous, and if it’s been all beer and skittles under Don why is it that four directors have resigned from the SENZ board in the last month?
    Why are more than 25% of the staff on over $100K , why are there now 12 people on $210k to $220K when the year before there were only four, the harder you scratch the more you will find, nothing disinfects like sunlight.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote