Former lord mayor Nuatali Nelmes and City of Newcastle chief executive Jeremy Bath's fees for work as directors on two Newcastle Airport boards have risen to nearly $80,000 each per year.
The figure has quietly increased by 60 per cent in the five years since Cr Nelmes used her casting vote to appoint herself to the board in 2019 for a fee of $50,000. City of Newcastle said the fees are not reported because they are paid by the airport.
The directors fees were paid when Cr Nelmes was earning about $145,000 from her combined roles as councillor and lord mayor. Mr Bath earns $513,000 a year.
Independent Cr Peter Gittens questioned Mr Bath at the new council's meeting last week, asking if the remuneration had changed and if so, whether those changes should be made public.
Mr Bath said he "couldn't tell him" exactly what the pay was and would have to take the question on notice.
"When I commenced with Newcastle Airport on the board in 2018 I think it was, the director's fee was $50,000," he said.
"Since that time, the director's fee has been indexed, so I can't tell you exactly what it is, happy to take that on notice and report back."
Mr Bath said he "thinks" there might have been a period during the pandemic where the indexation on director's fees was suspended.
The City of Newcastle and Port Stephens Council jointly own Newcastle Airport.
The councils nominate two directors each to the Newcastle Airport Pty Ltd (NAPL) and the Greater Newcastle Aerotropolis (GNAPL) boards.
The airport's sustained growth in recent years has delivered significant returns to its shareholders - its value has increased from $102 million in 2019 to $430 million today.
But the appointment and payment of council representatives to its board has also become increasingly contentious.
In March 2019 the roles paid $50,000 per year. That has since increased to $72,277 plus superannuation, which takes the total figure to close to $80,000.
A line item in Port Stephens Council's annual report reflects how much its directors earn from their board positions. However, City of Newcastle argues that because Newcastle Airport pays the directors it is not obliged to do so.
The airport's other directors include chair Jude Munro AO, deputy chair Samantha Martin-Williams, Morgan Parker, Neil Hart AM, Lee de Winton and Mark Young.
In a statement, a City of Newcastle spokeswoman said at the time the directors fees were set "many years ago", preparation was undertaken by the Airport's People and Culture Committee. Cr Nelmes and Mr Bath were not members of the committee at the time.
The directors' fees were set in line with state government and market-based remuneration guidelines.
"While all directors are remunerated for their attendance at the NAPL and GNAPL meetings, the four shareholder representatives are required to also attend meetings of the Airport Partnership and meetings of the associated trust companies," the spokeswoman said.
"They must also attend Director Appointment Committee meetings.
"These requirements are due to what is a complex corporate structure caused by the Commonwealth's ownership of the runway, which is then leased to Newcastle Airport, and the need to satisfy governance requirements stipulated by the NSW Government's Local Government Act (1993) and the Federal Government's Corporations Act (2001)."
Since July 1 last year, Cr Nelmes and Mr Bath have each attended 46 of a possible 50 meetings. This does not include their attendance at strategic planning workshops as well as advocacy with stakeholders including federal and state government ministers.
But a source with knowledge of how the airport boards operate told the Newcastle Herald they considered the high number of meeting attendances to be "double dipping".
"The multiple meetings they apparently go to is a double-edged excuse for them," the source said.
"How can they justify spending so much time away from running council operations and still claim full salary whilst being paid a high fee from the airport? This is significant double dipping at the ratepayers' expense."
Former Port Stephens mayor Ryan Palmer, who did not contest the recent election, chose to keep the directors' remuneration during his second term. He gave the money to the council in his first term.
A Port Stephens Council spokeswoman said the roles would continue to be held by general manager Tim Crosdale and incoming mayor Leah Anderson.
It is unclear if Ms Anderson will keep the director's payment or donate it.
At Newcastle council, airport director roles were previously handed to the lord mayor and chief executive under a document that sets out the pair's decision-making powers.
Last week the council voted to strip newly-elected lord mayor Ross Kerridge of powers afforded to his predecessor Cr Nelmes, in what he said smacked of a "deliberate ambush" to undermine his ability to do the job.
The council will vote on who takes the two director positions after a briefing at the airport next week.
In a Lord Mayoral Minute, Cr Kerridge vowed to donate his payment to charity if he took on the role, and noted there "may be some ambiguity" as to whether the lord mayor position as director of airport-related companies is "ex-officio" or not.
"So whether or not it's an ex-officio position, clearly, the current arrangement has been that the fees are paid to the directors personally, and I gave an undertaking during the election that I would be using those fees for charitable purposes, and I wish to confirm that," he said.
He also declared what he believed at the time to be a non-pecuniary, less than significant interest because of a family member's employment related to the airport.
"Although I do not believe that it would ever be involved in negotiations with the airport, and thus I will remain in the chamber for this item," he said.
However, in recent days, Cr Kerridge has been advised he does have a conflict of interest which prevents him from being a board member.
At the meeting, Labor Cr Declan Clausen said there were elements of the Lord Mayoral Minute he felt "uncomfortable" supporting, particularly around whether the position is ex-officio.
"I'm concerned that a resolution of this council that states there might be ambiguity about an important shareholding of council introduces some governance risk and concern that I hope you have contemplated in drafting the motion in this manner," he said.
Cr Clausen said that "clearly" Cr Kerridge was in a fortunate position to be able to accept a role and choose not to be paid for it.
"This is not a trivial board, it is a very serious, ASIC regulated board, regulating and overseeing a very complicated operation at the Newcastle Airport, something that we have seen hundreds of millions of dollars in investment in recent years and something that I know a number of other councils are passionate about in terms of the economic diversification and change of our region," he said.
"I think that it is important that each of the directors on that board are treated equitably and have the right to choose whether they accept a fee or not and I note the decision you've made."
Councillors have requested a report from the Newcastle Airport board about the goings-on at the airport.
