The vice-chancellor earned between $550,000 and $559,000 last year, making him the second highest-paid tertiary head in New Zealand, the State Services Commission annual report figures released this week showed.
Only University of Auckland vice-chancellor Stuart McCutcheon was ahead of him in the tertiary sector, earning $610,000-$619,000, the figures showed.
Auckland and Otago universities are the two largest tertiary institutions in New Zealand, with assets worth more than $1 billion, annual budgets of more than $500 million and several thousand staff.
Even so, Prof Skegg's salary was up on his 2008 remuneration, which fell somewhere between $530,000 and $539,000, and substantially above the $330,000 to $339,000 he was paid when he took up the post in 2005.
The figures prompted State Services Commissioner Iain Rennie to say employers in the tertiary sector were not showing the same level of restraint as other agencies in the public service.
Prof Skegg was overseas and unavailable for comment yesterday, and a university spokesman said nobody else was available to answer questions.
Elsewhere, Otago Polytechnic chief executive Phil Ker's salary increased to between $300,000 and $309,000 last year, up from $280,000-$289,000 the previous year.
Mr Ker was in Auckland yesterday but did not return ODT calls.
Telford Rural Polytechnic chief executive Jonathan Walmisley's salary remained unchanged again last year, at between $190,000 and $199,000, as did Southern Institute of Technology chief executive Penny Simmonds' salary of $230,000-$239,000.
Aoraki Polytechnic's new chief executive, Kay Nelson - who began work in June last year - received between $110,000 and $119,000 for her work last year.
She replaced former chief executive Wendy Smith, who received $220,000-$229,000 the previous year.
At the same time, the number of staff at universities and other tertiary institutions earning more than $100,000 a year increased by 21% in the year ended June, the commission's figures showed.
In total, 4944 public servants and 4240 staff from the tertiary education sector earned more than $100,000.
While Auckland's vice-chancellor was the highest paid in the tertiary sector, the heads of Otago, Massey, Canterbury, Victoria and Waikato universities and the Auckland University of Technology were all paid more than $400,000.
However, Tertiary Education Union national secretary Sharn Riggs responded, saying ordinary staff had exercised considerable restraint over the last 18 months, with most having pay increases of less than the rate of inflation.
The commissioner's report focused on those earning over $100,000, but almost all general staff - and even the majority of academics - earned "nowhere near that amount of money".
The number of people earning more than $100,000 in the public sector increased over the year by 4%. That was down from a 26% increase in the previous year.
New Zealand Transport Agency head Geoff Dangerfield was the highest paid Crown entity chief executive with $560,000-$569,999. ACC chief Jan White was second on $550,000-$559,000 and Auckland District Health Board CEO Garry Smith third with $540,000-$549,999.
Tertiary Education Commission head Roy Sharp earns $490,000-$499,999, about $100,000 more than Prime Minister John Key's annual salary.
The report showed that while the overall bill for state sector heads' remuneration fell by $434,000, several chief executives were paid more.
Ministry of Education chief executive Karen Sewell and IRD boss Robert Russell got increases of up to $20,000. Ms Sewell's pay went from $480,000-$489,999 to $500,000-$509,999; and Mr Russell's from $440,000-$449,999 to $460,000-$469,999.
Other increases went to Ministry of Agriculture's Murray Sherwin, Ministry of Justice's Belinda Clark, Department of Conservation's Al Morrison and Department of Corrections' Barry Matthews.
Ministry of Transport CEO Martin Matthews also received a rise (up from $350,000-$359,999 to $360,000-$369,999), even though he had not had a performance review.
Ministry of Social Development chief executive Peter Hughes and Ministry of Foreign Affairs and Trade boss John Allen were tied for highest-paid bureaucrat on $570,000-$579,999.
Treasury secretary John Whitehead was runner-up on $560,000-$569,999.
The $434,000 drop in the total wage bill was partly due to the mergers of the New Zealand Food Safety Authority with the Ministry of Agriculture and Fisheries and the National Library and Archives New Zealand with the Department of Internal Affairs, which meant three chief executive roles were cut.
