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Don Elder resigns from Solid Energy

Beleaguered Solid Energy chief executive officer, Don Elder, has announced his resignation from the company.

Mr Elder was one of New Zealand's highest-paid executives.

He was paid $1.1 million according to 2012 annual accounts, and received more bonuses earlier.

He oversaw a period of rapid expansion of Solid Energy's workforce and operations, including purchase of the Pike River coal mine last year.

A media statement says  discussions between Mr Elder and the board of directors have been under way for some time.

He has decided to step down immediately but to remain available to work for the company for a period to assist with a transition.

Dr Elder says in the statement that as the company worked its way out of the major global market downturn in 2012, including significant restructuring, the board would be considering many future changes.

Chairman Mark Ford says that under Dr Elder's leadership since May 2000 Solid Energy grew substantially and achieved many successes. He thanks Mr Elder for his 12 years of loyal service to the company.

Garry Diack, previously the company’s group manager organisational development and performance, will be the interim chief executive until a new appointment is made.

More by Chris Hutching

Comments and questions

Can someone please explain to me why the head of a government department is paid $1.1m annual salary, plus bonuses?

I assume you are talking about Elder? If so, that answer is because that is what he is worth.

Always the simplistic answer from people until they realised they have severely overpaid for the performance they got.

Nearly 20 years on from Rogernomics, the SOE model still to get thru' to some people's heads!

Moron - market rate.
Head of Bathurst Resources, which is not in full production yet, is on $A650k.

Plenty of capable people would do it for less than $1 million. Self-serving exisitng CEO's club in NZ.

He asked and got it. Now what is that old adage? If you don't ask you will never know.

And if you ask a board too scared to refuse a pay rise every year you get lots.

Because Solid Energy is not a government department (which tend to only spend taxpayers money, not generate any income) but a business that just happens to be owned by the government. A quick glance at the company's annual reports will show you that over the period 2001 to 2011, the shareholder equity increased by nearly $500m under Don's leadership...

Could this be related to the Crown Monitoring Agency recently finding that Solid Energy had overstated its value by 1 billion dollars as compared to an independent valuation (as reported by NBR)? Maybe the shareholder equity gains are just illusory? Still worth the salary?

It s known as market rates - that is, a person in a similar position in Australia would be paid the equivalent in $A. That is to attract the likes of Elder you have to pay the $. At the time he was seen as worth the money. I wonder what his termination bonus will be?

Forget what Don Elder got paid for doing a real job. Concentate on what chairman Mark Ford gets for running an Auckland water monopoly, and doing very little in the way of anything anywhere without the support of high-paid consultants. Cut out the middle man and just pay the consultants.

Well how about NZ's 'service sector' bunch of leeches. Lawyers who have created the Maori claims and RMA industries, councils that have created obtuse building codes and zoning nightmares - yet miss leaky buildings...
Not much value add from any of them.

From the Grey Star a few weeks back the minor piece of news that the average yearly production per staff member at Spring Creek was 1000 tonnes - at Francis Mining up the road at Blackball the average production per staff member was 10,000 tonnes. At Francis Mining they let the phone ring - at Spring Creek 20 lined up to answer it.

That is why Brent Francis is the man who can underwrite the Crusaders franchise while Dr Don is advising all the staff at Spring Creek that their jobs are gone.

All Elder was good for, like so many public servant bosses, was creating huge bureuacracies.

Solid Energy brought a highly profitable pellet fire business and soon sent it broke as well.

And they tell me the head office in Christchurch(ironic really a coal company having a head office in a city where you are not allowed to burn coal) is a dead set palace. I bet (without knowing) Brent Francis' HQ in Chch is not quite so lavish.

The reality is Solid Energy could quickly return to profitability if they (1) sacked the rest of the HQ staff and hangers on and (2) let all their mining licences and gear out to tender on a royalty basis. Invariably, the private sector is vastly better at extracting full value in any business environment.

I don't think many who defend SOEs or quasi-government departments of one type or another have ever been in business for themselves.

Some of his assistants are/were on six figures, and are apparently getting nice fat redundancy payouts.

And the week redundancies were announced at Solid Energy, with people losing their jobs, all the head office staff got paid nice fat bonuses.

And the week redundancies were announced at Solid Energy, HQ staff were paid big bonuses.

I've been told even his PA was on six figures, and that she is getting a nice redundancy payout too...

Why don’t we all discuss how we could be earning $1.1m - instead of just criticising those who have already reached this enviable income level?

You could be charged for talking common sense if you carry on like that. Jealousy is alive and well in dear old NZ.

You make a valid point which has attracted 5 dislikes- says it all, really.

Just say you know what you are doing, then run your business into the ground. We can all do that. Problem solved.

Who were the silly board & executive people who thought commodity prices would remain high - and have now ditched skilled workers.
Ever heard of realistic forecasts and/or a strategy to cope with highs & lows?

Yes, don't wait years to partially privatise this SOE.
Fully privatise it now.