Energy sector top in CEO pay

Public organisations have paid about $90 million to their chief executives in a year - with some receiving rises of more than 20%, and one getting a 55% increase.

Public bosses received an average $340,000 each in the last financial year - up $14,000 (4.3%) on the previous year. The median income in New Zealand from wages and salaries during the same period increased $1600 (4%) to $41,600.

But some chief executives received rises far in excess of these percentages, according to a New Zealand Herald survey of about 300 Crown entities, councils, state-owned enterprises and other organisations in the public sector.

The best-paid chief executives were from state-owned energy companies.

Mighty River Power, Solid Energy, Meridian Energy and Genesis Power all paid their chief executives more than $1 million. Big rises took their deals to more than $5.5 million combined.

Mighty River increased its chief executive's pay by 34%, or $450,000, to $1.8 million. Most of the increase resulted from the company meeting performance targets.

The figures have drawn criticism from unions at a time when the Government has proposed shake-ups to the public sector.

State Services Commissioner Iain Rennie said he expected public entities to "exercise restraint" in the coming year for chief executive pay and "to propose increases only where the chief executive has performed strongly or in exceptional circumstances".

Other entities run as private firms, such as TVNZ, were also on the higher end of the CEO pay scale. These state-owned enterprises pay their salaries from revenue rather than taxes.

By comparison, local council CEOs were paid about half on average, while the remuneration at state departments and ministries fell for the year.

Public Service Association national secretary Richard Wagstaff said movements in salaries in the senior echelons of the public service had been outstripping those in the rest of the workforce for decades.

"CEOs in the public sector do carry enormous responsibilities and they have big jobs - nobody's questioning that - but everyone in the public sector is under a lot of pressure, and when the people on top of the pile get rewarded well in excess of everyone else, it's not a good look and it really just doesn't feel fair."

Council of Trade Unions economist Bill Rosenberg said some rises given to public-body chief executives were as much as other workers in the same organisations were paid in a year.

"These huge pay increases have been justified for too long on the basis of superior performance, but we are yet to see any justification for that kind of statement."

Labour Party state services spokesman Chris Hipkins saw the increases as a "slap in the face" to public sector workers fearing redundancy amid the Government's public sector reforms.

"There does need to be restraint. It has got out of control and, at a local government level, I think some of these CEOs' salaries are very hard to justify."

Local Government New Zealand president Lawrence Yule said council CEO salaries had risen, but still lagged behind rates in the private sector and in many top public sector roles.

"You will also find a number of councils over the last few years, often at the CEOs' request, haven't had pay increases," Mr Yule said.

"If you go and look in just about any region and see what CEOs of polytechs, universities, lines companies and hospital boards are paid, certainly in most provincial regions they are higher than the council chief executives."

Comparing pay packets in different years is prone to variation due to large payments whenever chief executives leave.

- Jamie Morton and Michael Dickison

 

 

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