BIG BUCKS FOR GOLF
Petrojam pays millions for GM’s club membership; Watson cites networking value of benefit
For nearly 20 years, the State-owned oil refinery Petrojam has been paying out millions of dollars in golf fees for its chief executive. The payments, which began in 2004, cover annual membership fees for Petrojam General Manager Winston Watson at...
For nearly 20 years, the State-owned oil refinery Petrojam has been paying out millions of dollars in golf fees for its chief executive.
The payments, which began in 2004, cover annual membership fees for Petrojam General Manager Winston Watson at one of the two main golf clubs in the Corporate Area, the company disclosed last week.
Watson is set to demit office at the end of this month, and his successor, Telroy Morgan, “may not have that because it will be a different negotiation”, said Wayne Chen, chairman of the Petrojam board of directors.
Invoices show that the State-owned refinery paid membership fees totalling $1.2 million for 2023, 2022 and 2021, Petrojam disclosed on July 6 in response to an access to information request submitted by The Sunday Gleaner.
The company said that $423,000 – nearly two-thirds of the annual national minimum wage – was paid for this year, $407,000 last year, and $370,000 in 2021. The total payment made for the preceding 16-year period has not been disclosed.
Chen confirmed that he approved the most recent payment.
“I am the only one they pay [golf fees] for as general manager. I am not aware of anyone else,” said Watson, adding that the payments were approved by the board of directors “over succeeding years”.
Watson, who was appointed managing director of Petrojam in 2000 then general manager in 2007, explained that golf club membership was a part of his “negotiating package” because it was a benefit he had before taking the reins at Petrojam.
“I had a conversation with the chairman and said, ‘This is a benefit I have and I would like it and it helps with my networking, interacting with different people in the industry’, and it was approved on that basis,” he said.
The Ministry of Science, Energy, Telecommunications and Transport, which has oversight responsibility for the refinery, is aware of the payments, Permanent Secretary Carol Palmer confirmed in response to questions from The Sunday Gleaner.
However, Palmer said that the ministry is not involved in the determination of wage packages for employees at Petrojam, “which is a body corporate”.
Further, she said that there is no law or policy that required Petrojam to seek the ministry’s approval for the payment.
“The ministry is not a part of the process. These matters are handled by the company and its board,” Palmer said.
One industry insider took issue with the payments, pointing out that Petrojam is one of several cash-rich publicly-owned entities whose employees, particularly executives, are already well-paid.
“He would be one of the highest-paid public servants even without this latest compensation review. You must pay those things out of your salary,” said the insider, who did not want to be identified.
Chen acknowledged that Watson is “near the top” of the salary scale for executives in the public sector, but defended the payments, describing them as “nothing out of the norm or unusual”.
“It is not, at all, without precedent, bearing in mind that a lot of businesses, a lot of interactions and meetings take place on the golf course at that level,” the Petrojam chairman said during an interview on Thursday.
“Globally, at a certain level, certainly in multinationals, if you go to the golf clubs, you are gonna see the CEOs of other companies there. As someone who has operated in the private sector, it is nothing unusual where a part of the package of the chief executive is the membership to clubs where they are going to interact with other chief executives,” he said.
For Chen, the question to be asked is whether Jamaicans want the best and most qualified person for the job of chief executive of one of the largest public corporations in the country.
“If so, what’s the market rate to get a well-qualified individual?” he questioned.
Good governance practice
But the industry insider insisted that “just in terms of good governance practice”, Petrojam should not be paying golf club membership fees.
“So, if the next man has an interest in, I don’t know, horse racing and him go Caymanas Park go place bets, you are going to pay for that?” the insider questioned, making reference to the country’s sole horse racing track.
“As a principle, I think you pay a man a salary which is commensurate with his job and then him spend him money whichever way him want to use it. I don’t think you should be paying his golf fees.”
Chen did not back down when told of this assertion.
“Obviously, this person don’t understand how business works. That’s something people negotiate and get … . That’s strictly between him and a board 20 years ago,” the Petrojam chairman said.
The incoming Petrojam general manager, who has been a long-serving member of the company’s executive management team and who will take office on August 1, disclosed during a court hearing in May that no golf club membership fees are paid for him.
He was giving evidence in the criminal trial of former Petrojam Chairman Dr Perceval Singh and former General Manager Floyd Grindley.
The response was the same for Howard Mollison, who served as general manager of the State-owned refinery for one year and five months, starting in February 2015.
“None was ever paid for me,” he insisted.
Mollison and Grindley were appointed while Watson was on secondment to Petrojam’s then-parent company, the Petroleum Corporation of Jamaica.