The Business Herald’s markets and banking reporter.

The public servant on more than $1m

Adrian Orr received a 23 per cent increase in total remuneration to $1.03m in the financial year to June 30, 2016, up from $830,925 in the previous year.
Adrian Orr received a 23 per cent increase in total remuneration to $1.03m in the financial year to June 30, 2016, up from $830,925 in the previous year.

One of New Zealand's highest paid public servants received a 23 per cent pay rise in the last year.

New Zealand Superannuation Fund chief executive Adrian Orr's pay cracked the $1 million mark for the first time in the 12 months to June 30, thanks to a chunky bonus.

He took home $1.03m, up from $830,925 in the previous year.

READ MORE: Super Fund's Annual Report

The heads of New Zealand's top listed companies enjoyed an average pay rise of 12 per cent in 2015, according to the Business Herald's executive pay survey.

Orr's pay rise came as the $31.4 billion Super Fund - established in 2003 to help fund future superannuation payments - returned just 1.89 per cent in its last financial year.

That was down from 14.6 per cent a year earlier, a decline it blamed on weakness in global markets.

However, an improved performance over July and August saw the fund's 12-month return to the end of August come in at 10.3 per cent.

Orr's 2016 remuneration included a $334,799 bonus, up from a $234,847 bonus in the previous year.

Super Fund chairwoman Catherine Savage said his remuneration was "competitive and appropriate given the nature and complexity of the role" and "not high compared with international peers".

"It reflects the Guardians' highly specialised focus and the potential difficulty in replacing the CEO's skill set," Savage said.

"The role is unique in New Zealand and requires original strategic thinking and leadership."

Savage said the 23 per cent pay increase Orr received in the 2016 year was partly a result of changes to the incentive scheme.

That, she said, involved the CEO and other leadership team members becoming eligible, from July 1 last year, for the same incentive scheme as the fund's investments staff (60 per cent of base remuneration compared to 40 per cent previously).

"The extension of the 60 per cent scheme to the CEO and other members of the leadership team reflected the nature of their work and a desire - given the need for succession planning - to maintain appropriate relativity with other roles in the organisation," Savage said.

"The additional potential 20 per cent is based on fund performance and is payable only when the fund out-performs its benchmarks."

The fund out-performed its passive reference portfolio benchmark by 0.52 per cent ($155 million) in the last financial year, mainly as a result of a strong performance by its timber and infrastructure investments.

The Super Fund has returned 9.72 per cent per annum since its inception, making it one of the world's best-performing sovereign wealth funds.

- NZ Herald

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