Claire Trevett is the New Zealand Herald’s deputy political editor.

Public sector chief executives: Who is getting paid the most?

State Services Commissioner Peter Hughes is one of the highest earners, getting $630,000. Photo / Mark Mitchell
State Services Commissioner Peter Hughes is one of the highest earners, getting $630,000. Photo / Mark Mitchell

New State Services Commissioner Peter Hughes was one of the highest paid public servants when he was Education Secretary but is now promising a "conservative approach" to pay increases for chief executives.

The annual release of the remuneration for public sector chief executives shows
Adrian Orr, the chief executive of the Super Fund, remains the highest paid head, getting $950,000 - $960,000 over the past year - at least $100,000 more than the year before.

The second highest paid was ACC head Scott Pickering on $810,000 - $820,000.

Auckland University's Stuart McCutcheon was the second highest, getting $710,000-$720,000.

The highest paid chief of a public service department was former State Services Commissioner Iain Rennie, who got $760,000 to $770,000 - a sum which included $93,500 in the payout of entitlements on his final day.

The figures show former Education Secretary Peter Hughes was one of the highest earners, getting $630,000. Hughes is now the State Services Commissioner and in his first release of the salary increases for state sector bosses, he pledged to take a "conservative approach" to CEO pay increases.

"We need to make sure we pay well enough to get highly skilled and qualified people leading our government agencies, but we also need to ensure the salaries paid are defensible."

The average increase for the 103 Crown entity chief executives was 3.4 per cent.

Adrian Orr, the chief executive of the Super Fund, remains the highest paid head, getting $760,000-$770,000 over the past year. Photo / File
Adrian Orr, the chief executive of the Super Fund, remains the highest paid head, getting $760,000-$770,000 over the past year. Photo / File

Of the 14 public service chief executives who had salary reviews over the past year, individual pay increases ranged from 5.8 per cent to zero.

The highest earners included Treasury head Gabriel Makhlouf ($640,000), Ministry of Social Development head Brendan Boyle ($620,000) and Ministry of Business, Innovation and Employment head David Smol ($620,000).

The Auckland DHB head Ailsa Claire was the highest paid of the DHBs chiefs, getting $610,000.

The average increase across staff in the wider public service was 2.1 per cent.

The report shows total remuneration received by Government department and Crown entities' CEOs, including any bonuses, superannuation contributions, and benefits such as extra leave.

Auckland University's Stuart McCutcheon was the second highest, getting $710,000-$720,000. Photo / NZ Listener
Auckland University's Stuart McCutcheon was the second highest, getting $710,000-$720,000. Photo / NZ Listener

The report shows the 26 public service chief executives got an average increase of 1.3 per cent over the past year, taking the average salary to $406,732. That was 5.5 times more than their employees earned.

Most public service CEO salaries are set by the State Services Commissioner while Crown entity boards set their CEO salaries.

Those set by the independent Remuneration Authority include the State Services Commissioner, Crown Law, GCSB, Police, the Defence Force and the SIS.

The State Services Commission also had the highest average staff salaries ($130,951) followed by Defence ($113,345), and Treasury ($112,029). The average salary for staff in the office of the Prime Minister and Cabinet was $100,536.

The highest paid chief of a public service department was former State Services Commissioner Iain Rennie, who got $760,000 to $770,000 - a sum which included a payout on his final day. Photo / File
The highest paid chief of a public service department was former State Services Commissioner Iain Rennie, who got $760,000 to $770,000 - a sum which included a payout on his final day. Photo / File

Gender gap

A parallel report on pay across the public sector showed the proportion of women in senior leadership roles in the public service had risen to 45.2 per cent but the pay gap between men and women in senior leadership roles was at 8.9 per cent.

Across the whole public service the pay gap had dropped 0.5 points to 13.5 per cent - the lowest since 2000 and a result Hughes said was pleasing.

The average salary for men had increased by 1.8 per cent to $80,293 while the average for women was up 2.4 per cent, to an average of $69,438.

The main driver of the gap was over-representation of women in lower paid jobs such as call centres and administration - women made up 82 per cent of clerical and administrative roles in the public service but 61 per cent of the total workforce.

Across individual departments, the gap ranged from the 46.4 per cent at the Ministry of Defence to 3 per cent in favour of women at the Ministry of Women's Affairs.

Other departments with a big gap included the Crown Law Office (33 per cent), Education (25.7 per cent), Treasury (23 per cent) and the State Services Commission itself (22 per cent).

Those with a narrow gap include Corrections (2.3 per cent) and the Ministry for Pacific Peoples, (1.8 per cent in favour of women.)

The report said the gaps were driven by gender imbalances in different departments. It was also more volatile in smaller departments where turnover of a few staff members could have a significant impact on the average.

There were also persistently high pay gaps for Asian, Maori and Pacific workers in the public service - the pay gap for Asian staff was 11.6 per cent, for Maori it was 11 per cent and for Pacific Island staff it was 20.6 per cent.

European men earned an average of $83,784 and European women earned $71,787 while Pacific men earned $61,625 and Pacific women earned $57,913 on average.

- NZ Herald

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