Five more staff members at The Warehouse Group were paid more than $1 million in the company's last financial year - up from just one staffer a year earlier.
In the year ended July 30, six employees at the NZX-listed retailer - one of the country's largest - were paid a salary of more than $1m, including incentives, and two severance packages. The highest salary recorded was $1.93m.
Group chief executive Nick Grayston was paid $1.77m in the last financial year.
The Group, which operates The Warehouse Red Shed, Warehouse Stationery, Noel Leeming and Torpedo7 stores, has employed a string of senior executives over the past few years, including Andrew Berglund as an executive creative director and Keryn McKenzie as head of group insights and data, announced yesterday.
First Union general secretary Dennis Maga said he did not believe the $1m paypackets were justified.
"Nick Grayston is bringing in his own people, from the US and looking at reducing the number of staff that can be replaced by digital technology to run the operation," Maga said.
"We don't believe it's justified, we don't believe that should be the direction of The Warehouse."
Warehouse Group chairwoman Joan Withers told the Herald executive remuneration packages were set after a detailed assessment of market rates.
"The packages are designed to recruit and retain the high-level talent necessary to execute the company's radical transformation programme," Withers said.
In the six months to January 31, The Warehouse Group posted an adjusted net profit after tax result of $37.7m, down 16 per cent from $45m a year earlier, and operating revenue dropped 0.9 per cent.
Red Shed sales of $940m in the first six months of the year were down from $975.1m during the same period a year earlier.
Maga said First Union was surprised by the retailer's "top-heavy management strategy", and concerned the spend on executives could harm the company.
"Bringing in new positions instead of reducing the number of those at head office and produce more jobs on the ground is contrary to the direction of The Warehouse Group to be a competitive company in the next couple of years," he said.
"They have different kinds of business partners, managers, merchandisers to the point where even us as a union are quite confused about that structure."
John McGill, chief executive of remuneration company Strategic Pay, said it was expected that The Warehouse Group would have high-paid executives.
"If you employ thousands of people and your turnover is very high, you do need good people to run it. Will you get good people to run it if you pay them $100,000? I very much doubt it," McGill said. "Part of that was driven by pay practices offshore, particularly in America, and we live with the results of it in New Zealand.
"If we want to attract top professionals from overseas, and certainly at chief executive officer level at The Warehouse or Briscoes, that's where they go when they recruit and that also applies with some of these senior executives," he said.
"The Warehouse is under severe pressure at the moment with online retailing, and Amazon heading over this way so I wonder if that's resulted in some realignment in senior tops and whether they are hiring digital specialists."
In comparison, and while Briscoe Group is considerably smaller with annual turnover of $600m to The Warehouse Group's $3 billion, it has just one employee paid more than $1m, that being managing director Rod Duke.
Briscoe posted a record full-year profit of $61.3 million after tax, up 3.2 per cent from $59.42m the previous year. Annual sales topped $600m for the first time, at $603.1m, with same-store sales up 3.11 per cent and online up 35 per cent.
"It's much easier to justify large salaries when the organisation is having a good or spectacular year, but they may be rebuilding for some innovations to enable them to retain or even increase market share," McGill said.