A $255,000 lift, justified by comparison
Auckland Council is about to consider fee rises of 18 to 33 percent for directors across its four major council-controlled organisations, pushing the total annual bill up by $255,000 to $1.65 million. Watercare directors face the biggest jump at 33 percent, the largest of the four.
The review leans on two arguments to get there. One is that the Government has approved significant increases for Crown board fees. The other is that private-sector directors, particularly in comparable sectors, are paid more. Both comparisons deserve stress-testing, because the entire case for the CCO model rests on the idea that these companies bring commercial discipline to public services. When it comes to director pay, the logic quietly flips.
The private-sector numbers do look higher
On the surface, the market argument has some teeth. NZXplorer’s compensation data, drawn from thousands of remuneration records across NZX issuers, puts the all-directors median around $102,000, with the Utilities sector, the closest comparator to Watercare, sitting near $182,000 for chairs and $181,000 for non-executive directors. If Auckland’s CCO fees sit well below those levels, a case for some catch-up exists.
But NZX utilities operate in a fundamentally different environment. They answer to investors, face capital-market scrutiny, and carry genuine commercial risk, including the possibility of underperformance being punished by a falling share price or a takeover. Auckland CCOs face none of that. Ratepayers fund Watercare whether it performs or not. There are no activist shareholders, no takeover threat, and no capital at risk on the directors’ side. Borrowing the price tag of a competitive market while keeping the protections of a public monopoly is not a like-for-like comparison.
The wider director market isn’t moving at 33 percent
The broader governance market is rising, but nowhere near this fast. The Institute of Directors survey published in September 2025 found the median non-executive director fee rose 7.4 percent to over $53,000, with directors citing heavier workloads across cyber security, climate and AI. That is a legitimate basis for an increase. It is a long way from 33 percent.
The government-pay comparison is even weaker. Public Service Commission data shows average public service base salaries rose about 1.6 percent in 2025, with tier-one chief executive pay up around 2.1 percent. Those are the people running entire departments. If Crown board fees have risen sharply, that is a separate category being used to justify a number that sits well outside every other public-sector benchmark.
The FENZ warning sign
There is a recent precedent for exactly this move. A government-approved review lifted the Fire and Emergency New Zealand board chair fee from $60,000 to $110,000 and member fees from $30,000 to $60,000, increases of up to 83 percent. The backlash was immediate, with critics arguing a taxpayer-funded emergency service had drifted from its community-service roots and calling the timing tone deaf.
The counter-argument, made by Mike Hosking, is that cheap is no way to run a business and that underpaying governance roles produces worse outcomes. Fair enough as far as it goes. But it does not answer the central question, which is whether a public monopoly should be priced at private-sector rates when it faces none of the private-sector consequences.
A pattern ratepayers are already funding
The fee rise lands inside a wider cost story. In February 2026, Mayor Wayne Brown was defending consultant spending of roughly $60 million and $58 million across the first two full years of his term. The $255,000 director increase is small by comparison, but it adds to a cumulative picture of governance-cost inflation that ratepayers cannot vote against.
A 2015 parliamentary review of the CCO model warned that these structures reduce direct accountability to communities and can lift overall service-delivery costs. That tension has never gone away. The council’s review appears to ask what comparable directors are paid. The question it does not appear to ask is the one that matters most to ratepayers, which is whether they are buying private-sector performance or simply funding another layer of public-sector governance inflation. Councillors would do well to ask it before signing off.
Sources
- Directors of Auckland Council companies set for fee rises of up to 33 percent – Newsroom (2026-07-28)
- A number of New Zealand board directors say they’re unhappy with their workload and pay – NZCity/IoD survey (2025-09-07)
- Auckland Mayor Wayne Brown defends surge in Auckland Council consultant costs – NZCity (2026-02-04)
- Senior manager remuneration/pay – Public Service Commission
- Perspective with Heather du Plessis-Allan: It’s tone deaf for FENZ board members to get such a big pay rise – Newstalk ZB
- Mike’s Minute: Do we complain about public service pay too much? – Newstalk ZB
- Part 3: Is a council-controlled organisation the right option? – Parliament NZ (2015)
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